A big part of your estate plan is appointing an executor, a person who will oversee your estate after you are gone.
But a story in Forbes shows that being an executor is not a job to be taken lightly.
The story is about a 73-year-old homemaker with only a high school education who was named executor of a cousin’s estate. There were seven relatives and three charities due parts of the estate, but mistakes by the executor resulted in a $1.2 million bill from the IRS.
The executor missed deadlines and blamed a lawyer she had hired, who had fallen ill.
One of the missed deadlines was the filing of the estate’s tax return. Things got very complicated.
The lawyer was fired and another one hired. Then the relatives moved to get the executor removed. A malpractice suit was filed against the executor and the first lawyer. It was settled and the original executor was allowed to pursue a refund of the penalties and interest imposed by the IRS.
But a judge ruled against her bid to have the penalties refunded. An appeal is pending.
Whatever happens, the moral of the story is clear: if you appoint an executor, find one who knows what he or she is doing. If you agree to be an executor, know what you are getting yourself into.
If you have questions about estate planning, feel free to contact us at (626) 696-3145.
