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Reasons Why You Should Hire a Professional Executor

Nathan R. Olansen
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Key takeaways:

  • A fiduciary is a person or entity appointed to handle financial and legal matters for someone else’s assets and property.
  • The executor, also known as your personal representative, is responsible for managing all affairs of your probate estate. This falls under the fiduciary role.
  • The trustee is responsible for managing all affairs of your trust property after your incapacity or death. This also falls under the fiduciary role.
  • Certain attributes can disqualify someone from being an executor, like a felony or bankruptcy.
  • Speaking to an estate administration attorney can help you avoid critical missteps as an executor.

For clients with considerable wealth, the process of appointing an executor for their estate or trustee for their trust is a decision of significant magnitude. This task involves more than just financial management; it is about ensuring the responsible and respectful handling of one’s legacy. The main challenge lies in finding an individual who is not only legally and financially competent but also aligned with the ethical and personal values of the estate and trust owner.

The complexity of this process increases with the value of your assets. Selecting an appropriate executor or trustee requires a thorough understanding of the legal framework, alongside an appreciation of the client’s long-term objectives and values. In the absence of legal guidance, this crucial task can become a source of considerable stress and uncertainty.

The attorneys at Midgett Preti Olansen can help provide the necessary legal acumen and an in-depth understanding of the intricacies involved in managing high-value estates and trusts. Our attorneys can facilitate the selection process, making sure that the appointed fiduciary is capable of managing the estate and trust effectively while adhering to the client’s goals and wishes.

Role of Fiduciaries in Estate and Trust Management

In estate and trust management, a fiduciary is an individual or organization that is designated to manage both financial and legal issues for another’s assets and property. A fiduciary can serve several different roles, including:

  • Power of attorney, where the fiduciary is able to make financial decisions on your behalf during your incapacity, including those involving investments.
  • Executor, to administer the decedent’s estate, which includes consolidating assets, paying any outstanding debts, and distributing assets to designated beneficiaries through probate.
  • Conservator, to step in to handle your financial affairs should you become incapacitated. Similar to a power of attorney except the conservator is court-appointed.
  • Trustee, for managing assets owned within a trust created in accordance with the terms included in the legal document (e.g., filing tax returns and making distributions).

Duties of an Executor For Estate Administration

fountain pen next to fiduciary seal

An executor, often referred to as your personal representative, is the person who represents the probate estate in all matters. This person will be obligated to make sure your wishes and interests, as expressed in your last will and testament, are at the forefront of every action taken.

The fiduciary duties of an executor are numerous, and they will be held to certain legal standards. As such, a background in the legal field can be helpful.

Before naming the executor for your Virginia estate, consider the duties that they will need to carry out, such as:

  • Interpreting the terms included in your will, then administering those terms or stipulations
  • Recording all estate transactions
  • Preparing and filing relevant tax returns (e.g., income, estate and gift)
  • Understanding and making important investment decisions
  • Interacting with your financial advisor or other involved professional
  • Determining beneficiary allocations and distributing those assets in a timely manner

Criteria for Selecting an Executor or Trustee in Virginia

When you choose an executor, first and foremost, you will want it to be somebody you trust. While Virginia law does not provide for who you should choose, it does say that a person must be willing and able to serve. It is also important to note that if this person is out of state, there are additional Virginia statutory rules that need to be followed to ensure compliance with resident agent requirements.

To avoid dying intestate and allowing the court to name an executor and determine beneficiaries, you will need to execute a last will and testament to map out your wishes. Within this document, you will select an executor of your choosing.

Factors to consider when selecting your executor include:

  • Age, requiring a person to be at least 18 years old
  • Mental capacity, especially when it comes to understanding and being able to administer your expressed wishes
  • State residency, as there may be a legal requirement for them to reside in the same state as where you conduct your estate planning
  • Professional background and qualifications, to help streamline the administration of your estate and meet ensure compliance with all legal requirements

While family members, such as a surviving spouse or adult child, are often the first consideration, be sure to evaluate their abilities. Also, consider your family dynamics and how other members may react and respond following your passing, when emotions are at their most fragile. If you want to avoid the turmoil that can develop within families, you may want to name a neutral party as your executor, such as a loyal friend or a professional Virginia estate planning attorney. Remember, everybody fights, and nobody fights like family!

What Disqualifies an Executor in Virginia?

While Virginia law does not provide specific requirements for the selection of an executor, you need to be aware of what may disqualify a particular person from serving. Bankruptcy or a felony may disqualify a person from being an executor. This situation is especially relevant when a bond is required per the terms of your will. Also, a conflict of interest or an incapacity may disqualify an executor.

Challenges of Not Using a Professional Executor

If you decide that you do not want to use a professional executor for your estate, you may come across some common challenges:

  • Conflict of interest
  • Lack of experience handling legal documents
  • Increased time burden
  • failure to properly understand the terms of your will

Conflict of Interest

When a conflict of interest is suspected or recognized by heirs, a challenge to the right to fulfill the executor role may arise. When such challenges occur, the executor will have to stop all activities as a fiduciary and negotiate a resolution before taking any further steps. Such conflict of interest challenges may occur if the executor is a creditor of the estate, purchases any estate assets, or it appears that the executor is championing their own interests instead of that of the decedent.

Lack of Knowledge or Experience

A lack of legal document knowledge and experience may be hazardous if an executor must go through a dispute with heirs. Mistakes can be made, and these can be long-lasting and possibly challenged in court.

Time-Consuming

While legal documents like wills and trusts specify what the wishes are for an estate, carrying them out, maintaining adequate records, and meeting legal obligations will be time-consuming. From tracking down all assets to preparing tax returns, the executor must always be aware of the responsibilities involved. When a professional executor is chosen to administer the estate, however, timely steps will be taken based on previous experience and knowledge, which can streamline the process saving the heirs time and money.

Three Reasons to Hire a Virginia Professional Executor

man signing document with lawyer helping

When it comes to hiring a professional executor, you may find it stressful but necessary so as to avoid finding yourself in a situation that jeopardizes your legacy. Three main reasons for hiring a Virginia professional executor are as follows.

  • Experience: knowing what steps are required to properly administer your estate
  • Liability: removing liability from family and friends and decreasing the possibility of error
  • Cost: lowering the cost of estate administration by hiring lawyers who can efficiently complete the probate process

Experience

A professional executor has knowledge of and experience with potential issues that may arise in the administration of the estate will know what steps to take to complete the administration of your estate. This professional also understands how to handle legal and tax issues involving your estate and will focus on your wishes when implementing the next steps. Experience will also be important should there be complexity involved with the estate, requiring special handling in the valuation of certain assets and in avoiding potential tax liabilities.

The attorneys at Midgett Preti Olansen have experience with accurate estate record keeping and understand how to execute an estate of considerable value. Collectively, the Virginia Beach trust and estate administration attorneys here at our law firm have over 100 years of experience in the legal field, including with trust administration and the entire probate process.

Liability

An executor takes on the legal responsibility of administering your estate, thus putting themselves in a position of potential liability. As a result, a loved one can face a personal lawsuit should something go wrong or a beneficiary disagrees with the decisions made. To avoid this situation, you can choose a professional executor who understands and will implement the process according to experience, the law and the terms of your will. Doing so can give you peace of mind that your loved ones stay protected.

Costs

Estate administration costs include executor fees, whether that executor is a family member or a professional. In some instances, hiring a professional executor can actually cost less than a family member as they can take advantage of their experience and knowledge, making the process quicker and more efficient. The estate attorneys with Midgett Preti Olansen are highly experienced in the will probate process and can quickly meet the needs of your estate, keeping more assets in your estate so that they can be distributed to your chosen beneficiaries.

Are Executor Fees Taxable in Virginia?

Executor fees are to compensate the executor who manages the estate. The fees for executors in Virginia will depend on many factors, including the wishes of the estate owner, the complexity of the estate, and the expected responsibilities. It is important to also note that these executor fees are considered taxable and must be included on income tax returns. As such, your selected executor will need to be aware of this before accepting compensation.

What Our Clients Are Saying

When it comes to reasons for working with the estate planning attorneys here at Midgett Preti Olansen, our clients say it best. Their shared testimonials showcase our law firm’s legal services, professionalism, compassion, and how much we value the attorney-client relationship.

“My family has had a long standing relationship with Todd Preti and value his insight and expertise. The entire staff has always been professional and pleasant and focused on our needs and what’s best for us.” — Andy H.

“Went to the law firm of Midgett Preti Olansen (MPO) for the first time last week. My appointment was with Mr. Nathan Olansen to have a new will and trusts set up for me. Mr. Olansen was professional, courteous and knowledgeable. He carefully listened to my concerns and answered all of my questions and gave me important advice. I never felt rushed during our first meeting either. Have several papers that I received from him which I will complete before I go back next time. Mr. Olansen informed me that we will have at least two more appointments. He told me the amount I would have to pay for his services and I felt it was a fair price. I found it very comfortable dealing with Mr. Olansen and I look forward to our next meeting.” — K.S.H.

Keep Your Time. Give Us the Responsibility.

Serving as an executor of an estate involves several potential roles, and knowing how to proceed can be overwhelming and complex to navigate, not to mention time-consuming. Instead of stressing over the many duties involved, let the Virginia trust and administration attorneys with Midgett Preti Olansen take on these fiduciary services and responsibilities for you. Schedule a consultation today by calling our Virginia Beach office at 757-687-8888 or contacting us through our online form. We proudly serve clients throughout the Hampton Roads area, including Norfolk, Chesapeake, Suffolk, Hampton, Newport News, Eastern Shore, Virginia Beach, and the Eastern Shore.

Nathan headshot

Written By Nathan R. Olansen

Shareholder

Nathan R. Olansen is a Shareholder in the law firm of Midgett Preti Olansen. His practice is focused on estate planning, probate and trust administration, IRS and state and local tax audit and tax collection cases, as well as individual and entity tax planning, asset protection and a variety of related transactional matters.

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