An estate executor or administrator’s job can be a difficult and time-consuming task. The job involves a great deal of administration tasks, handling legal and financial affairs, and keeping beneficiaries satisfied with the administration process. Executors are often motivated to honor their loved one by making sure the estate is done right and disputes are kept to a minimum.
What is the best way to wind down and close the estate administration process? Should a representative just stop working when it feels right to do so? That’s not a good plan if the goal is to stay out of trouble.
Executors should always keep in mind that the executor alone is the one who can be held personally liable for any mistakes. Major mistakes in estate administration can result in surcharge petitions filed by disappointed beneficiaries or creditors. A successful petition can result in the executor paying out of their personal funds to pay for mistakes. Due to the risks of serving as representative, it makes sense to conclude estate administration in a way that reduces risks that could arise after the estate is closed.
Using Formal Settlement Agreements
One way the executor can be protected is through a family settlement agreement. This is a binding agreement between the executor and the beneficiaries regarding how the administration process was handled. The agreement provides for legal protections for the executor such as a release of liability and indemnification, among other things. These protections can prevent beneficiaries from bringing future claims against the representative. The agreement also provides recourse for the executor to recover estate assets if a creditor seeks payment at a later date.
Drafting and negotiating a settlement agreement is a difficult task but it is also an important key to protecting the executor. Every estate should conclude with a settlement agreement or a petition to close the estate in the Orphans’ Court.
As a probate law firm for estate executors, we help settle estates efficiently and reduce stress. If you know someone faced with a probate process or roadblocks to an estate property sale, please have them contact us for a free evaluation at:
Phone: (215) 918-4242
If you are not quite ready for a consultation, download our probate handbook HERE. We’ll send you helpful probate guides and resources so you know how to handle the estate.