State and relevant case law provides that personal representatives or executors have fiduciary duties to the beneficiaries of an estate. This means the executor is obligated to exercise good faith and diligence as he executes a will; thereby, ensuring beneficiaries receive what they are entitled to under the provisions of the will. Those actions typically require an executor to pay debts of the decedent, taxes for the estate and distribute estate assets. Typically, distribution occurs after the executor has collected assets and presented an accounting to the court. Then, the executor files taxes and ensures other debts are satisfied, while maintaining accurate records of all such activities. This allows the executor to know which assets remain in the estate that can be distributed. Although laws differ between states, most states afford the beneficiaries the right to request an accounting. All of these actions must be performed in the best interest of the beneficiaries. Additionally, fiduciary duties require executors to avoid any negligent actions, as well as any "self-dealing," which means the executor would benefit rather than the beneficiaries. The executor's fiduciary duties terminate when the estate closes.
With fiduciary duties comes personal liability for the executor. If the executor fails to meet his fiduciary duties, including properly distributing the assets of the estate as well as paying the debts and taxes of the estate or the executor acts negligently, the beneficiaries can sue the executor. The executor could find his personal assets vulnerable in these situations. The executor is the person who is legally responsible for covering all estate expenses, which is why keeping detailed and accurate records is so important. Though being an executor may seem like a daunting task, executors are permitted to hire outside assistance and professionals to assist in administering the estate. Many executors utilize the services of lawyers and accountants. The overarching fiduciary duties still apply, and the executor should take care not to spend carelessly, because that could be viewed as a breach of fiduciary duty.
A testator who wishes to have a specific person serve as his executor can assuage some fears regarding the responsibilities and liabilities associated with those responsibilities. Testators may include what is called an exculpatory clause in the will, which can relieve the executor of certain liability. However, that relief typically does not extend to certain actions that involve gross negligence or willful misconduct on the part of the executor. The testator may consult an online legal document provider when drafting his will, as there are some states that do not permit this practice. For example, New York law prohibits exculpatory clauses, but Pennsylvania and Texas allow them.
Even if you are appointed an executor, you do not have to accept the appointment as there is no legal obligation to do so. You must decide whether or not you wish to take on the responsibility and liability, in addition to the emotional issues that come with the job. In the event the person named as executor or a family member is not willing to serve, the probate court has the power to appoint an individual or bank to serve as the executor. If, however, you begin to serve as executor and decide you do not wish to continue, you may renounce your position. You will still have the same duties and obligations as executor until someone else has been appointed.