California Inheritance Lawyers

What is an executor?

An estate executor is a person or entity that handles the estate of a deceased as designated in their Will proved valid. Typically, the estate owner selects and names the Executor themselves during the estate planning or something like that.

The person or entity is in charge of settling the deceased’s estate, and that includes:

• Filing the Will and or trust document with the court
• Petitioning for probate
• Tracking down all heirs and beneficiaries
• Inventorying and valuation of assets
• Collecting benefits
• Paying debts and taxes
• Distributing assets
• Investing estate assets
• Mediating conflicts between beneficiaries.

If the deceased’s Will is missing or determined invalid, the court will appoint someone as the estate administrator.

Who can be named the Executor?

As mentioned, the state doesn’t have rules concerning the appointment of executors. Instead, anyone above 18 with a sound mind and judgment can serve in the position. But even if there are no definite rules on executor selection, it doesn’t mean you should throw caution to the wind during the process.

This is the person you are entrusting with the execution of your estate. They will have access to your bank accounts to move funds, pay debts and taxes, collect benefits, make investment decisions, and sell assets if necessary. It’s a fiduciary responsibility. Think carefully about who to name. The last thing you want is for your estate to serve as a cautionary tale for others.

It’s always wise to pick someone trustworthy, loyal, and within the state so they can handle day-to-day issues during the probate process, which can take months or even years. They can be one of the beneficiaries, a relative, a friend, or your estate attorney.

What is a beneficiary?

A beneficiary is someone designated to benefit from a deceased estate via a valid Will or trust. Frankly, anyone, including family members, friends, businesses, and charities, can be named a beneficiary. They can be assigned financial gifts or specific assets such as life insurance, 401K, annuities, etc.

Beneficiary selection is an essential part of estate planning. The terms of the Trust or Will determine their rights. A Will or Trust is a tool for you to control your estate from beyond, ensuring it’s handled as per your wishes. You can even leave your assets to one individual, naming them the sole beneficiary.

Who is the sole beneficiary?

A sole beneficiary is precisely what you think it is. This is where the deceased’s assets are assigned to a single entity or person via Will or Trust, eliminating any possibility of joint tenancy.

Sole beneficiary status can happen due to various reasons. For example, if an estate owner has a close relationship with one person, they want to ensure that the person receives everything.

It can also happen if the estate owner is unmarried and without kids, so they have to leave all their assets to their oldest sibling or charity of choice.

Sole beneficiary simplifies the probate process, reducing the number of beneficiaries to deal with. However, it can be risky if the person or entity being awarded sole ownership is not up to the task, mismanaging the asset or estate.

Working with an inheritance attorney to put the assets in a Trust, safe from lawsuits or creditors, is always wise. Select a trustworthy and capable beneficiary once you’ve set up a trust.

Will a sole beneficiary be entitled to everything?

If one is named a sole beneficiary in a legal document, they are entitled to get everything covered. That said, they cannot take assets designated to other beneficiaries. Often, the trust, will, or legal document clearly defines what belongs to them and what doesn’t.

For example, suppose you have life insurance plus other assets and properties, and you name your brother as the sole beneficiary of the life insurance policy and your spouse the sole beneficiary in your Will.

In that case, you have two sole beneficiaries. But your brother only benefits from the life insurance policy, while your spouse claims everything in the Will. They don’t have to share their inheritance.

But a sole beneficiary is different from a sole heir. For example, if you only have one sibling and they die unmarried, without kids and a Will or Trust, then you are the sole heir to their estate, per California intestacy laws.

Can a sole beneficiary serve as an executor?

Frankly, there’s no law prohibiting it. Anyone can be named Executor, and that includes sole beneficiaries. Naming the sole beneficiary the Executor, too, will allow the disposition of your estate to be handled by one person following your demise. This ensures privacy.

However, whether to appoint a sole beneficiary as the Executor, too, depends on your trust in the individual and the kinds of assets at stake. Most importantly, the legal system has checks and balances to protect assets in probate.

Just like other executors, sole beneficiaries who are also executors are in charge of asset inventorying and valuation, tracking down beneficiaries or heirs, paying taxes and debts, collecting benefits, investing and selling assets if necessary, and settling and closing the estate. It seems a lot, and yeah, it is! That’s why it’s essential to select a trustworthy and competent person.

What can’t a sole beneficiary who’s also an executor do?

A sole beneficiary who’s also an executor can keep an estate safe for other heirs or beneficiaries, but they cannot hoard beyond what is designated for them.

An executor can earn a fee, as stated in the Will, but they cannot attempt to profit from their position by self-dealing or avoiding disclosing conflict. The latter case arises when selling an asset and the buyer is their friend, resulting in an inferior price.

All executors, including those who are also sole beneficiaries, don’t have the power to decide who gets what. That’s the purpose of the Will or Trust document. The Executor has to follow what it says.

Additionally, the Executor cannot take cash from the estate account for their benefit. They can take cash to pay debts, taxes, or make investments. But they have to wait for their share just like other heirs or beneficiaries before they can use their inheritance in their projects. And must provide an accounting of the money used to pay debts and taxes.

If the sole beneficiary, who is also an executor, wants to sell the asset designated to them, they are free to do so. But if they want to sell any other estate asset to settle the deceased’s debt, they must seek approval from the beneficiaries or the court. Also, they can only sell a property following an appraisal and must bring in at least 90% of its determined value.

Tips for naming sole beneficiary as an executor

As mentioned, naming a sole beneficiary as the Executor is not something to take lightly. It would be best to ensure that the person or entity is trustworthy and has the skills and experience necessary to administer and manage your estate.

The best thing to do is set up a trust and then choose one of the beneficiaries as the trustee. That way, the estate is kept safe from lawsuits or creditors, and the trustee does their best to administer it according to your wishes because they have a vested interest.

However, that’s where the point mentioned above on trustworthiness makes sense. Otherwise, things might go haywire if they become dissatisfied with their assigned portion.

Additionally, if you want to leave an asset in your Will to a sole beneficiary, name a contingent beneficiary to inherit the asset should the sole beneficiary’s death precede yours. Also, go through your beneficiary designations regularly and make changes as necessary.

Finally, work with an attorney. Inheritance laws are complex. Working with an experienced trust inheritance attorney is advantageous in various ways. They can help you plan your estate, establish trusts, and write a will.

Trust and estate attorneys can also help you take advantage of tax breaks to reduce or avoid estate taxes and set clear guidelines to keep creditors from getting their mitts on your assets once you are gone.

If you want to learn more about the services of inheritance attorneys, we will be happy to talk to you. Schedule a free appointment on our website to speak with an expert today.