It is understandable if you worry about becoming an executor for a loved one. Estate administration can be a pressing job. You could even become the target of litigation if an heir accuses you of mismanaging assets or mishandling the probate process.
While it is not always possible to avoid the ire of a beneficiary, any executor can take proactive steps to ward off unnecessary accusations of estate mismanagement.
Follow instructions precisely
Your top priority should be to carry out the final wishes of your relative as stated in the will. Deviation from the will frequently triggers lawsuits from disgruntled heirs. Meticulously follow distribution instructions, even if beneficiaries pressure you to divert more assets their way.
Maintain open communication
Failing to keep heirs informed often breeds suspicion. Send each beneficiary a copy of the will so they understand their inheritance. Provide regular status updates throughout probate. Quickly respond to any questions or concerns from beneficiaries. Detailed communication demonstrates you have nothing to hide.
Secure assets quickly
Act fast to complete an estate inventory and secure valuables like jewelry, art and heirlooms. Changing locks on property can also act to prevent theft. The quicker you gain control over assets, the less likely anything gets lost, stolen or destroyed while in your possession.
Keep comprehensive records
Document every financial transaction related to the estate. Log maintenance and repairs performed on properties. Collect receipts for all expenses paid with estate funds. Have each beneficiary sign when receiving their inheritance. Accurate record keeping proves you have acted responsibly if anyone questions your handling of estate affairs.
Purchase errors and omissions insurance
This specialized policy protects executors from claims of mismanagement. According to Forbes, such insurance has an average cost of $61 a month and $735 a year, but the exact price varies depending on the occupation and risk involved.
While taking out an E&O policy cannot prevent lawsuits, it does provide coverage for legal costs and any damages awarded if a court finds you liable. This added insurance can give you peace of mind as you proceed with your duties.
You should be able to perform your executor functions without unnecessary worry. Proactive options are worth your time to consider as they might help you avoid a legal contest or prepare you if litigation does occur.