An essential part of writing a last will and testament is to name an executor of one’s estate. While many fiduciaries do what is expected of them in good faith, some can disregard their responsibilities. In some instances, the requirements of the law in North Carolina can disqualify the executor.
Proper legal and estate planning helps families to protect their assets with the proper instructions. A Raleigh estate planning attorney understands every legal requirement and can ensure that testators make the right decisions. If you get it wrong, the chances are that the executor will be contested.
On What Grounds Can an Executor be Removed?
Executors have a responsibility to protect the estate’s assets. However, if the estate beneficiaries feel like the executor is incompetent or dishonest, they can have the court remove him/her.
They need to prove that he/she:
- Is convicted of a felony
- Grossly mismanages the estate’s property
- Can’t account for the estate’s assets
- Misuses the estate’s funds for personal expenses
- Doesn’t comply with court orders
- Doesn’t undertake the duties of an executor
Is Conflict of Interest Enough to Remove an Executor?
If an executor has any interest that can possibly interfere with the estate’s administration, the court may remove him/her from the position. Notably, being a beneficiary and an executor at the same time is not enough for the court to declare a conflict of interest. In most cases, inheritors take good care of the assets because they have a strong incentive to do so.
An excellent example is an executor that guaranteed a loan to the estate, and the borrower isn’t likely to repay it. In that case, the executor would be able to collect directly from him/herself. Basically, the conflict’s magnitude should make it impossible for the person to act in an executor’s capacity.
Who Names the New Executor?
If the will names an alternative executor, the court might appoint the person after removing the previous one. However, if the alternative person cannot serve in the executor’s position for some legal reason, the court will appoint another person.
State laws usually stipulate the priority list of people who can become executors if the will doesn’t name anyone or if they were contested and removed. The order can begin with the surviving spouse, followed by the adult children, then the distant family members.
What is the Executor Mandated to Do?
Executors have a host of responsibilities aligned with the deceased’s will and the beneficiaries’ interests. They handle the probate process and make decisions concerning the assets. Here is what they can do:
- Open the probate with the court
- Identify and list the deceased’s assets
- Notify the heirs and other interested parties
- Manage the estate’s administration
- Pay taxes
- Pay the deceased’s debts
- Distribute the funds or property to the heirs
- Close the estate
What is an Executor Prohibited from Doing?
While the executor makes many critical decisions regarding the estate, there are limitations to what he/she can do. Here is what one cannot do:
- Execute the will before the testator dies: Neither the beneficiaries nor the executor has any rights over the estate’s owner if he is still alive.
- Sign a will on behalf of the deceased: If the estate owner didn’t sign the will before he died, the executor should not attempt to sign it. According to the intestate succession laws, an unsigned will is invalid, and distribution of the deceased’s property will be distributed to beneficiaries.
- Operate before being appointed by the court: The executor cannot make payments or sell assets before the court approves their probate petition. They can only do fundamental analysis to see what is in the estate as they wait for the approval.
- Sell assets below the fair market value without the beneficiaries agreeing: Selling the estate at discounted rates to friends goes against an executor’s noble duties. Instead, he/she should treat it as their own and give the beneficiaries their respective portion as indicated in the will.
- Change provisions in the will: The executor cannot alter the will to include anything that wasn’t originally there. Notably, if anyone else wants to be a beneficiary and is not in the will, they need to file a petition.
- Stop the heirs or beneficiaries from contesting the will: While a contest makes the executor’s work harder, he/she has no authority to stop them.
Who Cannot Qualify as an Executor?
The court may reject the probate petition of an executor if they find them unfit, according to N.C. Gen. Stat. 28A-4-2, 28A-9-1. The clerk of the superior court follows special rules and only accepts people that have met certain basic requirements.
One cannot qualify if they:
- Are below 18 years old
- Are incapacitated or of unsound mind
- Have not “restored their citizenship” – not received an unconditional pardon, not completed their criminal sentence and terms of post-release supervision or parole
- Are illiterate
- Are a divorced or separated spouse of the deceased
- Are a spouse in a bigamous marriage with the deceased
- Are convicted for the murder of the deceased
- Decline the executor position in writing
Is an Out-of-State Executor Acceptable in North Carolina
If the appointed executor lives far away, they might be required to appoint a representative that lives in North Carolina. The agent will have the role of accepting legal papers on the estate’s behalf. A Raleigh wills and trusts lawyer can inform you about other requirements imposed on out-of-state executors.
Sound Counsel from a Legal Professional
Every family and business in North Carolina deserve innovative and practical solutions, a variety of planning services, and comprehensive legal advice. What’s more, it will not cost you anything to call a wills and trusts lawyer to learn more about how to safeguard your interests.
While estate and tax planning can be technical, the right legal counsel can make it simple to accomplish and understand. Building a long-term attorney-client relationship ensures that your needs are understood better and you receive more effective advice. Get started by calling estate planning attorneys at NC Planning at (919) 900-4720.