What Does Executor Of the Will Do? - The Michigan Probate Process
Jul 06, 2023This article by Michigan probate and estate planning attorney Nicole Wipp is not intended to be, and should not be construed as, legal advice. It is for general informational purposes only. For advice specific to your legal situation in Michigan, contact us.
Losing a loved one is a difficult and emotional time for everyone, and it can be especially overwhelming for those who have been appointed to handle the estate administration process.
Personal Representative: Michigan Estate Administration
Although we typically think of the person that handles estates after someone dies an "executor," in Michigan, this person is called a personal representative.
In other words, "personal representative" is simply the legal term for an executor of a will in Michigan. It's the same thing!
That being said, it is different if there is a trust involved. A person that handles the trust is called a "successor trustee."
Should you have a will or a trust? Read more about wills vs. trusts here.
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What Is An Executor, And What Do They Do?
An executor is a person or institution named in a will to manage the deceased person's estate during the probate process.
The duties of an executor include representing the estate in probate court and following the probate process by managing and distributing the deceased person's assets, paying debts, and ensuring that the wishes of the deceased are respected. Executors are also responsible for filing taxes, paying taxes, and managing the estate's financial affairs.
An Executor Of An Estate Needs To Follow All The Processes and Procedures Required In A Michigan Probate Court
Choosing the right estate executor is a critical decision that requires thinking carefully about the best candidate. It's advisable to choose someone trustworthy, reliable, and responsible. Your executor should also possess good judgment, organization, and communication skills.
These things are necessary because the rules of the probate court must be followed.
That's why it is also important to choose someone willing to serve.
Common executor choices include family members, close friends, or a professional fiduciary such as a bank or trust company.
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Who Is Best To Be An Executor Of A Will?
Choosing an executor of a will is a significant decision that requires careful consideration. The best executor for your will is a person who is knowledgeable in Michigan law (or is willing to consult with someone who is), trustworthy, a good communicator, and has the ability and desire to carry out your wishes efficiently and effectively.
Another factor to consider when selecting an executor is their age and availability. Being an executor is a significant responsibility that requires a significant amount of time and effort.
It is best to choose someone with a flexible schedule and who is willing to commit the necessary time to execute your will and attend court hearings. If you choose an older individual, you risk them passing away before they can execute your will, and if you choose someone too busy, they may not be able to fulfill their duties.
While selecting a family member may seem like the best choice, it is important to consider their experience and ability to handle the legal and financial complexities of the role. Choosing someone you trust with the right knowledge, skills, and expertise is imperative to manage your estate properly. If you have any questions or want professional help how to choose the best executor for your will, contact us.
A carefully chosen executor can make all the difference in ensuring your final wishes are honored.
Learn about Last WIll and Testaments.
A Deeper Look At Making the Choice of Who Should Represent An Estate
The first step to understanding the role of an executor of a will in Michigan is to know how they are appointed. The testator (person who made the will) usually names their desired personal representative in the will itself.
If no personal representative is named in the will, or if the person named is unable or unwilling to serve, the court will appoint someone to serve in this role. It’s important to note that the court will prefer to appoint the person designated in the will, but they will always prioritize the best interests of the estate and its beneficiaries.
Once appointed, the personal representative is responsible for administering the estate in accordance with the law. The personal representative must also keep beneficiaries informed about the estate and deceased person's property and status and ensure that their rights are protected throughout the process.
Learn more about Gift Taxes here.
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Family Member vs. Professional Executor:
When selecting an executor of your will, it is important to consider whether to choose a family member or a professional executor. While a family member may have a personal relationship with the deceased and better understand their wishes, a professional executor may have more experience and be better equipped to handle the legal and financial complexities of the role.
Trustworthiness:
Another important factor to consider is the executor's trustworthiness. The executor must have integrity, reliability, and excellent financial acumen. A trusted individual or professional executor should be appointed to execute your wishes efficiently and effectively.
Knowledge of Michigan Law:
To avoid delays and legal complications, it is crucial to appoint an executor knowledgeable about Michigan law, OR willing to consult with an attorney if complications arise. This person should be familiar with probate laws and procedures in Michigan and have the experience to identify and resolve potential issues.
Communication Skills:
Communication is key when it comes to executing a will. It is essential to appoint an executor who is a good communicator and can keep family members and beneficiaries informed during the process. A good executor should be able to provide regular updates and address any questions or concerns.
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Size of Estate Assets:
The size of your estate is also a critical factor to consider when selecting an executor. The more assets and beneficiaries an estate has, the more complex the estate will become.
Choosing an executor with experience working with more sizable or complex estates is vital for larger estates. They will have the necessary knowledge and expertise to manage large sums of money and make challenging decisions.
Understanding The Duties of The Executor
When someone passes away, their assets and liabilities must be accounted for and resolved.
This includes gathering and distributing assets, settling debts and liabilities, and filing tax returns. The executor is the person appointed to do all of these things.
Additionally, the executor performs other tasks, which include managing any real estate, businesses, or trusts included in the estate. Understanding these duties is critical to the executor's success in estate administration.
Identifying Assets and Liabilities
One of the primary responsibilities of the executor is to identify all the assets and liabilities of the deceased. This includes financial accounts, real estate, vehicles, and personal property.
The personal representative must also keep accurate records of all transactions and be prepared to provide an accounting to the court and beneficiaries if requested.
It also includes outstanding debts and liabilities, such as credit card bills, mortgages, and unpaid taxes. Once all of the deceased person's assets and liabilities have been identified, the executor will distribute or pay off those assets in the manner stated in the will.
Open An Estate Bank Account
An executor or an estate must almost always open an estate account. This account will be the one that pays bills, such as credit card companies, and receives funds before they are distributed to heirs.
Providing Notice to Potential Heirs and Creditors
One of the most important duties of the personal representative is to provide notice to potential heirs and creditors. This notice must be given promptly and specifically and include certain legal language to protect the estate from future claims.
Failure to provide proper notice can result in personal liability for the personal representative, so it’s important to understand these requirements and follow them closely.
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Distributing the Assets
When it comes to distributing the assets, the executor must follow the decedent's final wishes as stated in the will. If there is no will, the deceased is considered to have died "intestate," and the executor must follow Michigan law regarding the distribution of assets.
Distributing assets to beneficiaries involves many steps, including obtaining testamentary letters, opening a probate estate, serving notice to creditors, filing taxes, satisfying all debts and taxes, and dividing assets for distribution.
Filing Tax Returns
The next crucial step in executing an estate is filing tax returns. This step must be completed before distributing any assets, and it can be complicated, requiring the help of a tax professional.
The executor must file the decedent's final income tax return and an estate income tax return, if necessary. The tax returns must be paid out of the estate's funds.
Closing the Estate
Once these tasks are complete, the executor will close the estate.
A final report must be prepared for the beneficiaries, detailing all assets and liabilities and their distribution. The report must be presented to the probate court, which will approve and close the estate.
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Does The Executor of A Will Get Paid in Michigan?
An executor is entitled to reasonable compensation for their services in Michigan.
What is the Executor Fee in Michigan?
The state law does not specify a specific fee schedule. The probate court determines the compensation or negotiates with the beneficiaries or estate. It is important to note that if a family member is appointed executor, they may waive their right to a fee to maintain family harmony.
The average executor fee in Michigan is 2% to 4% of the gross estate value but can vary depending on the individual's experience and level of responsibility.
Can an Executor be Removed From Their Duties?
In Michigan, an executor can be removed if they fail to meet their duties or are found unsuitable for the role. Reasons for removal can include negligence, misconduct, or breach of fiduciary duties.
If you need to remove an executor from their duties, you must petition the local probate court, with valid reasons for removal.
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Does The Person Named in a Will as Executor Have to Serve?
Even if someone previously agreed that they would serve in this role, it is not required they do so if they change their mind. In that case, an individual named as their successor in the will would be appointed, or the court would choose an alternative.
Remember: Probate Takes Time. A Lot Of Time.
While family members are often chosen to serve as executors, it is essential to remember that being an executor can require significant time and effort.
In many cases, it may be advisable to seek the guidance of an experienced estate planning attorney to help navigate the process. An attorney can provide guidance on legal requirements, help manage the estate, and even represent the personal representative in court if necessary.
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Make Sure It's Done Right: Contact Us Today!
Choosing an executor for your will is a vital decision that requires careful thought. as the personal representative plays a crucial role in Michigan estate administration.
You should choose someone you trust and are willing to fulfill your final wishes. In Michigan, executors can be paid reasonable compensation for their services. If you have trouble finding a suitable executor, contact us, as we can provide guidance and support.
Consulting with legal professionals is essential to ensure your will is legally sound and your final wishes are respected.