The executor of a Will or Last Will is the person who, through the process called Probate is in charge of the transfer of assets from a deceased person to the deceased person’s beneficiaries. Can an executor of a will take everything? Let’s see. In Arizona we don’t use the term executor, instead we use the term Personal Representative. A Personal Representative is appointed by the Court to act on behalf of the deceased person. When the Personal Representative is appointed they have three jobs. The first job is to find and collect all of the deceased person’s assets. The second job is to pay all the bills and file all the income taxes. The last job is to give the beneficiaries their inheritance Let’s talk about each of the three jobs.
The first job is to find and collect all the assets owned by the deceased person at his or her death. These assets include only the assets which are in the name of the deceased person, but which cannot go to someone else, automatically. For example, if a bank account is owned by John Doe, and John Doe dies, that bank account will be included in the probate estate. If the bank account is in the name of John Doe and Mary Doe, and John Doe dies, the account will pass to Mary Doe automatically. When assets pass to another person automatically, there is no need to add the bank account into the probate. So, the bank account in John Doe’s name, and all the other assets in John Doe’s name, will have to be found. When all the assets are found, the assets need to be transferred into the name of the probate.
The second job is to pay all the bills that the deceased person did not pay, before they died. This job includes filing all the income tax returns. The Personal Representative has to pay all the bills, including the income tax bills with the probate assets. If there is a bank account with a lot of money in it, paying the bills is easy. But if the only asset in the probate is a house, the house is not made up of cash. That means, if the only asset is a house, the Personal Representative may have to sell the house to get the cash to pay the bills. Sometimes, there is no money left after all the bills are paid. If there is nothing left, the beneficiaries of the deceased person will not receive any inheritance. But if there are assets left after all the bills are paid, now the job of the Personal Representative is to give each of the beneficiaries their inheritance.
In order to give each beneficiary their inheritance, the Personal Representative has many calculations to perform. The Personal Representative starts with the value of all the assets of the deceased person. I want to use very simple numbers to explain. Let’s say that value is $100,000. Let’s also say the bills added up to $20,000. So that means there will be $80,000 left for the beneficiaries. If there are 4 beneficiaries who are entitled to one quarter of the estate, the Personal Representative will give each beneficiary a $20,000 inheritance. Here is the math:
|$100,000||Value of All Assets|
|($20,000)||Less the Amount of All Bills|
|$80,000||Total to be divided between beneficiaries|
|$20,000||To each of the 4 eaqual beneficiaries|
So can the Executor take everything?
Since the Personal Representative or Executor has control of all of the assets, the executor can take everything. So the answer is yes. But, in most cases, the Court is there to protect the beneficiaries. That means, although the executor can take everything, if the executor takes everything, the beneficiaries can ask the Court for help. The Court will help them get their inheritance.
The bottom line is, do you trust the Executor?