When someone dies, the property in his estate vests immediately in either his devisees (the people named in his Will) or in his heirs at law (if he wasfoolish enough not to have a Will).
Suppose TRS owns a yacht. He executes a Will that states his son, Theodore, will inherit the yacht. The moment TRS dies, Theodore immediately becomes the owner of the yacht.
That does not mean, however, that Theodore has a right to immediate possession of the yacht.
Nope, that right belongs to the executor of the estate. Once an executor is appointed, the executor has the right to possession of the property. In fact, the executor has a duty to take possession of the property. The executor holds the property “in trust” during administration of the estate.
The reason is that Theodore’s ownership of the yacht, and any other estate assets, is subject to payment of most of TRS’s debts. The executor has to make sure that the debts have been paid, including any tax liabilities, before he can distribute the property.
The executor is usually highly motivated to make sure the debts are paid, because he is personally liable for any unpaid debts to the extent property has been distributed.
Suppose the yacht was worth$100,000, and TRS had credit card debt of $30,000. If the executor distributes the yacht to Theodore without paying the credit card debt, then the executor is personally liable for $30,0000.
Since the yacht is essentially dry-docked during administration of the estate, the executor has the duty to make sure it is maintained and insured while under his care. And if by chance Theodore had already sailed off into the sunset with the yacht, then the executor has a duty to sail after him and get it back.
We’ve said it before, and we’ll say it again. Serving as an executor is not an easy job.
Hammerle Finley Law Firm. Give us a call. We can help.