Tax Treatment of Testamentary Trusts
Understand your duties as an Executor.
At some point in your life, you may be asked to be an Executor for a parent, sibling or even a good friend. Before accepting, it’s important to know what your responsibilities will be. Executors are named in a person’s Will and when that person passes away, the Executor named in their Will is responsible for gathering up the deceased’s assets, paying their debts and dividing whatever is left over among the deceased’s beneficiaries named in the Will. Sounds simple right?
While acting as Executor does not need to be the worst job in the world, it is often quite time-consuming and stressful, complicated by the deceased’s ongoing business obligations to be wound up, assets that are difficult to locate and value, feuding beneficiaries, and complicated tax filings. The Executor is responsible for, among other things, making funeral arrangements, securing all of the assets, locating the deceased’s creditors and applying to the courts for a grant of probate.
Though you cannot be forced to accept your appointment as Executor, once you have begun the process of dealing with any of the deceased’s assets after they pass away, you are legally obligated to fulfill all of your responsibilities as Executor, unless relieved of them by a court order. If you do not properly meet your obligations, you may be personally liable for any losses suffered by beneficiaries as a result of your errors or inaction.
This may sound like a lot, but the process can be made substantially easier with a little help from your professional advisors. If you are considering accepting an appointment as an Executor or have already been appointed, please come see us to ensure you understand the job that you are about to take on.