Avoid these mistakes as an executor

Executors generally mean well when it comes to managing estates in Pennsylvania. Even so, they are not immune to making costly mistakes that could reduce the value of the estate or make them financially liable for certain actions taken. This is why it is so important to let executors know beforehand of their duty and to pick someone who has a sound understanding of what to do.

MarketWatch identifies paying bills way too early as one of the big mistakes that executors make. It may seem like a financially responsible thing to do to pay bills on time, but it may not be the legally responsible action. It may constitute a breach of fiduciary duty to pay these debts ahead of others. If the estate then does not have enough money left over to pay debts that rank ahead of this, such as federal taxes, the executor may become personally liable to pay this.

More of a high-risk decision than a blatant mistake, some executors may take it upon themselves to attempt to increase the value of the estate during the settlement period by investing it. The amount specified must be distributed to the beneficiaries at the appointed time, regardless of how well the estate performed in the investment market. This again may make the executor personally liable — this time, for losses.

Forbes has some advice for people who want to avoid choosing an executor that may not be well-suited to the responsibilities of the position. It recommends looking for a person who is competent and trustworthy. It also recommends choosing someone who is currently appropriate versus someone who may be appropriate 30 years later. This only complicates the process, especially when it is possible to simply update the executor as things change. Note that if a person decides not to appoint an executor, the court may do so.