Question: When the estate is completely settled, what steps does the executor take to release himself from future liability?
Background: My brother is the Executor of an estate. He is worried about being liable to the beneficiaries of the estate for any mistake he might make. What should he do?
Loraine’s Answer: When an Executor has completed an estate administration in Georgia, he has two alternatives. The first option is to file a Petition for Discharge of Personal Representative to formally close the estate, which will remove the Executor from that role. As part of filing the Petition for Discharge, the Executor can also request that he be discharged from liability to beneficiaries or creditors. The second option is not to file a formal Petition for Discharge. In that case, the estate will remain open unless and until either a Petition for Discharge is filed or the estate closes by operation of law. In this situation, there will not be a general release from liability for the Executor. If an Executor wants to leave the estate open for a period of time after the administration has been completed but wants to have some protection against liability to the beneficiaries, he can ask the beneficiaries to sign releases after they have received their distributions.
An Executor can end up personally responsible for paying debts or beneficiaries under certain circumstances if an estate administration was not handled correctly, so this can be a critical issue. If your brother has been accused by beneficiaries or creditors of having mismanaged an estate, he should ideally have an experienced probate attorney help him figure out what needs to be fixed and then fix anything that may have been wrongly handled. That attorney can also defend him against any associated claims. Your brother should then consider filing a formal Petition for Discharge to close the estate and request the discharge from liability. However, if the beneficiaries are all happy and there are no known unpaid creditors, then your brother may want to just ask the beneficiaries to sign releases and not formally close the estate at this time. Either way, he should have a probate attorney helping him.
Key Estate Planning Takeaway: Serving as an Executor is a serious legal responsibility and every effort should be made to respect the deceased’s wishes as laid out in the Will. However, being an Executor is not a lifetime commitment. Once the estate is settled, it is wise to either formally close the estate or collect signed releases from beneficiaries to help protect the Executor from liability.
This “Q&A with Loraine” blog series features answers from Morgan + DiSalvo Partner Loraine DiSalvo to questions posted on www.avvo.com. A key takeaway from each exchange highlights an important facet of estate planning.
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