The "executor's year" is a rule of thumb. It refers to the fact that most estates should be wrapped up within a year of the executor getting a Grant of Probate, or an administrator getting a Grant of Administration.
One reason this rule of thumb exists is to remind executors that they don't have forever to take care of the estate. Beneficiaries and creditors have a vested interest in having matters concluded, and the executor is responsible for taking care of that.
Another reason we have the rule is to remind beneficiaries that estates cannot be wound up overnight. There is much more for an executor to do than most people realize, and some of it is truly time-consuming. Also, some of the matters that fall within the executor's responsibility rely on others to conclude, such as selling a house. You can't sell a house without a buyer, and the executor is only going to have so much control over that.
More complicated estates take longer. In some estates there are long-term leases to wind up, businesses to be sold, assets in other countries to deal with, or disputes about who is going to get what. You can expect those estates to take longer than others.
The effect of the rule is that a beneficiary who doesn't want to wait for his or her inheritance cannot force the executor to pay out his or her share within the executor's year. Nor is interest required to be paid by the estate on that inheritance until after the year is up.
The rule is meant to be workable for your average executor who is doing the best he or she can with the estate. However, we all know there are a few executors out there who refuse to do anything, leaving the estate and the beneficiaries at a standstill. Once the year is up, an unpaid beneficiary can take legal steps to have the estate administered. This could mean removing the executor entirely, requiring that a full accounting be prepared, or a dozen other things depending on the situation.
I am asked about the executor's year by beneficiaries and not usually by executors. If you are a residuary beneficiary who is frustrated with an executor who is not taking action, you might want to talk to an estate lawyer about it.
One reason this rule of thumb exists is to remind executors that they don't have forever to take care of the estate. Beneficiaries and creditors have a vested interest in having matters concluded, and the executor is responsible for taking care of that.
Another reason we have the rule is to remind beneficiaries that estates cannot be wound up overnight. There is much more for an executor to do than most people realize, and some of it is truly time-consuming. Also, some of the matters that fall within the executor's responsibility rely on others to conclude, such as selling a house. You can't sell a house without a buyer, and the executor is only going to have so much control over that.
More complicated estates take longer. In some estates there are long-term leases to wind up, businesses to be sold, assets in other countries to deal with, or disputes about who is going to get what. You can expect those estates to take longer than others.
The effect of the rule is that a beneficiary who doesn't want to wait for his or her inheritance cannot force the executor to pay out his or her share within the executor's year. Nor is interest required to be paid by the estate on that inheritance until after the year is up.
The rule is meant to be workable for your average executor who is doing the best he or she can with the estate. However, we all know there are a few executors out there who refuse to do anything, leaving the estate and the beneficiaries at a standstill. Once the year is up, an unpaid beneficiary can take legal steps to have the estate administered. This could mean removing the executor entirely, requiring that a full accounting be prepared, or a dozen other things depending on the situation.
I am asked about the executor's year by beneficiaries and not usually by executors. If you are a residuary beneficiary who is frustrated with an executor who is not taking action, you might want to talk to an estate lawyer about it.
No comments:
Post a Comment
Note: Only a member of this blog may post a comment.