The executor of an estate has a great deal of responsibility. She must gather the deceased’s assets and safeguard them during the probate process, and she must notify the deceased’s creditors of his death so they can make claims for payment. She has the power to reject claims if she doesn’t think they’re legitimate, but she has no right to unilaterally override the terms of the will. She usually can’t disburse estate assets or funds to beneficiaries without court approval.
Partial Distributions of the Estate
In most states, an executor must ask for and receive an order from the court approving the disbursements from the estate to beneficiaries even if probate has been completed. The court typically won’t allow the transfer of some estate assets to some beneficiaries before the estate closes – without a very good reason. For example, not making the transfer might cost the estate money, whereas making it would shift expenses or tax liability from the estate to the beneficiary and save the estate money.
Liability of Executors and Beneficiaries
Even if her state doesn’t require court approval for disbursements, an executor might be reluctant to make an early transfer because she runs the risk of being held personally liable if she does. If she distributes property and funds early, only to realize that the estate doesn’t have enough left over to pay all the deceased’s debts and taxes, she’s legally obligated in some states to pay out of her own pocket to cover them. Beneficiaries may also find that they’re responsible for satisfying the estate’s unpaid debts if they take early distributions.
Types of Distributions
The executor’s ability to make early disbursements also depends on the nature of the gift. Bequests are categorized as specific, demonstrative, general or residuary. A specific bequest involves a certain item of property that's easily pinpointed – say, a car or an artwork. This bequest type has priority and might be made early if the cost of maintaining the asset drains money from the estate. A demonstrative bequest involves cash paid from a specified account or from the sale of a certain asset. A general bequest might read, “To my nephew, I leave $1,000”; the $1,000 can come from any of the deceased’s assets. A residuary gift comes from the portion of the estate that remains after all other bequests have been made and the decedent’s debts and taxes have been paid. An executor can’t make such a bequest before probate closes, because she wouldn’t know the size of the residuary estate until then. Residuary bequests are often made as a percentage of what’s left.
An Executor’s Authority
An executor has very little right to override a will or the deceased’s wishes about whom he wants to receive his property. Even courts are reluctant to overrule a will’s terms without good cause, such as if an heir successfully contests it. However, some exceptions exist. With general bequests, she may have the option of transferring something of equal value to what the deceased wanted his beneficiary to have. In some states, if a beneficiary owes past-due child support, she’s legally obligated to transfer his bequest to the state to satisfy this debt instead of giving it to the beneficiary. But an executor can’t deny a gift or transfer it to a different beneficiary on her own decision. In fact, she could be held personally and financially liable if she does.