When an individual dies, he or she may have left directions for how his or her estate was to be distributed. However, before that can happen, it is important to first inventory the assets in an estate and file a tax return for that estate. This is generally done by an executor of an estate or the trustee under a trust. In many cases, the role of the executor and the trustee may be the same thing, although worded differently.
The person or entity asked to carry out a deceased person’s wishes generally has a fiduciary duty to the estate. This person or entity may retain an attorney to help handle any issues that may arise during probate or any other time before the estate is settled. The fiduciary may be held personally liable if a debt is not paid or a tax return is not filed.
Debts and taxes must generally be paid prior to assets being distributed. For instance, if a family member is bequeathed $50,000, that money will not be given until all other responsibilities have been fulfilled. Therefore, there is a chance that the estate may not have the $50,000 to distribute after taxes and other costs are attended to. It may be necessary in some cases to get a court order before making such distributions.
The best choice for the fiduciary is generally a trusted friend, family member or a reliable financial institution such as a bank. In some cases, an attorney will be named as the administrator of an estate. In addition to serving this role, an attorney may be able to help create wills or trusts that may help to ensure that an individual’s wishes are being honored.