The Executor is the person appointed in a will to administer the estate of the decedent. Typically, after the death of the testator the Executor makes an appointment with the Probate Division of the Circuit Court and, after producing the original of the will and the death certificate, is sworn to uphold his/her responsibilities to administer the estate properly and honestly. This is called “qualification,” and the Executor is given a certificate which evidences his/her office. The Executor’s duties are explained by the Clerk of Court.
An Administrator is the title given to a person appointed to administer an estate where there is no will (an “intestate estate”). He/she has the same duties as the Executor except that the beneficiaries of such an estate are set forth by statute since there is no will.
Over recent years the term Personal Representative (or “PR”) has come into use as a generic term which applies to either the Executor or the Administrator. For convenience this article will use the term PR hereafter to apply to both positions.
The qualification of the PR is recorded in the permanent records of the Probate Division which are open to the public. Over recent years this has led to a practice among real estate agents to review the records regularly and to contact the named persons to solicit listings for real estate which may be in the estate. One such person told your writer recently that he makes around 60 calls per week just from the Fairfax County records alone.
Virginia has a system for overseeing the actions of the PR through the Commissioner of Accounts who is appointed by the Circuit Court. After an initial meeting with the Clerk of the Probate Division, the PR will be dealing with the Commissioner. The inventory and accounting will be filed in the Commissioner’s office.
The office of the Commissioner of Accounts is usually very helpful to the lay person who is encountering responsibilities as PR. Regular “how to” seminars are provided free of charge, and staff is usually good about answering questions. Sometimes, however, it is wise to consult with an attorney as, for example, when creditors of the estate are involved or there are conflicts among beneficiaries. If the estate is insolvent (ie, more debt than assets), the PR should consult with counsel because paying one creditor ahead of others may constitute a “preference” for which the PR could be personally liable.
The PR must be careful to keep insurance coverage over the assets in the estate to prevent loss during administration. This can be problematic where there is unoccupied residential real estate.
A Trustee is the person(s) appointed to administer a trust. A trust may be established in a will (a “testamentary trust”), in which case it comes into existence at the death of the testator, or during lifetime (a “living trust” or an “inter vivos trust”). If the trust is established in a will, the nominated trustee must be qualified by the Probate Division of the Circuit Court just as a PR. The Trustee and the PR can be the same person(s). Depending on the terms of the will, the Trustee may or may not be required to file an inventory and accountings with the Commissioner as required of the PR.
Paradoxically, the Settlor(s) and the Trustee(s) of a living trust are usually the same people, so the parties are agreeing with themselves. The Trustee of a living trust does not need to qualify. Unlike a will it is not required to be recorded, so it provides a measure of privacy. The living trust is a time-tested, effective estate planning device.
From "Amy & Dan Smith's Planning for Life" column appearing monthly in the Blue Ridge Leader, Loudoun County, VA.
The foregoing article contains general legal information only and is not intended to convey legal advice. For legal advice regarding estate planning, the reader should contact his/her lawyer.
Daniel D. Smith is a partner in the law firm of Smith & Pugh, PLC, 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176. (Tel: 703-777-6084, www.smithpugh.com).
Amy V. Smith Wealth Management, LLC is an independent firm. Amy V. Smith, CFP, CIMA offers securities through Raymond James Financial Services, Inc., member FINRA/SIPC. Her office is located at 161 Fort Evans Road, NE, Suite 345, Leesburg, VA 20176. (Tel: 703-669-5022, www.amysmithwealthmanagement.com). Any opinions are those of Amy and Dan Smith and not necessarily those of Raymond James. Raymond James does not guarantee that the foregoing material is accurate or complete and does not provide legal advice. Dan Smith is not affiliated with Raymond James.