What is an Executor and When is it Advisable to Appoint One?What are the Costs for Appointing an Executor and Who Bears Them?What Duties Does an Executor Have and How are the Costs for Their Duties Reimbursed?This article answers these questions and provides an overview of the role and responsibilities of an executor.
Introduction
Definition and Explanation of the Term "Executor"
The term "executor" refers to a person appointed in a will to carry out the instructions of the deceased after their death. The executor is also known as a "will executor" or "testamentary heir." According to Section 2222 of the German Civil Code (BGB), the executor is responsible for executing the will and ensuring that the last wishes of the deceased are fulfilled (for further information: Certificate of Inheritance).
The executor must adhere to the will and the law while performing their duties. They are obligated to manage and distribute the inheritance properly and are legally authorized to represent the heir in legal matters. The executor must also demonstrate loyalty to both the deceased and the heir, and is required to keep and present all relevant documents and records as needed.
Explanation of the Role and Duties of an Executor
The role and duties of an executor are diverse and primarily include:
- Execution of the Deceased’s Last Will: The executor must ensure that the will is properly executed and that the deceased's instructions are followed.
- Administration and Distribution of the Estate: The executor is responsible for managing the estate and distributing it to the individuals or institutions specified by the deceased.
- Defense of the Estate Against Third Parties: The executor must ensure that the estate is defended against third parties and that the heir's interests are protected.
- Representation of the Heir in Legal Matters: The executor is authorized to represent the heir in legal matters and must make decisions and take actions that are in the best interest of the heir.
It is important for the executor to perform their duties carefully and responsibly to ensure that the deceased’s last wishes are implemented as intended.
2. Duties of an Executor
Execution of the Deceased's Last Will
The execution of the deceased's last will is one of the most important duties of an executor. It primarily involves implementing the instructions left by the deceased in their will. This may include distributing assets to specific individuals or institutions, setting up foundations, or making advance bequests. The executor must adhere to both the will and the law during this process and must not take any actions that contradict the deceased’s wishes.
The execution of the deceased's last will may also include fulfilling any conditions or stipulations set by the deceased in their will. For example, the deceased might have stipulated that a particular asset is to be transferred to an heir only after they have completed a specific education or after a certain period has elapsed. The executor is responsible for overseeing and ensuring that these conditions or stipulations are met.
Administration and Distribution of the Estate
The administration and distribution of the estate is another crucial duty of an executor. The executor is responsible for managing the estate properly and ensuring that the assets and property specified by the deceased are transferred to the individuals or institutions designated in the will. This includes tasks such as notifying the probate court of the estate, creating an estate inventory listing all assets and debts of the deceased, and ensuring that all taxes and fees related to the estate are paid on time.
The distribution of the estate usually follows the instructions set out by the deceased in the will (e.g., a Berliner Testament). The executor must ensure that the assets and property specified by the deceased are transferred to the appropriate individuals or institutions. If the will does not provide instructions regarding the distribution of the estate, the executor is required to distribute the estate according to legal regulations.
The administration and distribution of the estate generally require a high degree of responsibility and care. The executor must ensure that the estate is managed properly and that the assets and property designated by the deceased are transferred to the appropriate individuals or institutions.
An executor may also be tasked with defending the estate against third parties and representing the heirs in legal matters. This may be necessary if disputes arise among the heirs or with third parties, such as creditors. In such cases, the executor can act as an "impartial arbitrator" to ensure that the deceased's final wishes are properly executed. The executor can also represent the heir in legal matters, such as collecting debts or settling liabilities.
3. Duties of an Executor
An executor has several duties to perform as part of their role. Here are the key responsibilities of an executor:
1/ Duty of Loyalty to the Testator and Heir: The executor has a duty of loyalty to both the testator and the heir, and is obligated to properly execute the last wishes of the testator. This means the executor must consider the interests of both the testator and the heir and act in accordance with their wishes.
2/ Obligation to Properly Fulfill Duties: The executor is required to carry out the assigned duties properly. This can include managing assets, fulfilling the deceased's obligations, or representing the heir in legal matters.
3/ Obligation to Retain and Present Documents: The executor must carefully keep all documents and records related to their duties and present them when required.
4/ Obligation to Report to the Probate Court and Heir: The executor is required to submit regular reports to the probate court and the heir. These reports should provide an overview of the tasks completed and the status of the estate.
Costs for Appointing an Executor: What Does an Executor Cost?
The costs of appointing an executor depend on various factors and can vary by region and individual circumstances. Generally, there are two types of costs: the setup costs for establishing the role of the executor and the ongoing costs incurred during the execution of their duties.Setup costs may include notary and court fees, costs for the will itself, and possibly fees for legal advice. Ongoing costs can include fees for the executor, taxes, and potentially additional costs for professional services such as accounting or tax consulting.
Costs for the Execution of an Executor’s Duties (e.g., Administration Costs, Legal Costs)
The costs associated with carrying out the duties of an executor can vary depending on the nature and scope of the tasks undertaken and individual circumstances. Here are some potential costs that may arise:
- Administrative Costs: These can include costs for managing the deceased's assets, such as bank fees, taxes, or insurance.
- Legal Costs: If disputes arise among heirs or other parties, legal costs may be incurred for enforcing or defending claims.
- Executor’s Fees: The executor may charge a fee for their services. These fees can be based on an hourly rate or a percentage of the deceased's estate.
- Costs for Professional Services: The executor might also incur additional costs for professional services such as accounting, tax consulting, or property management.
Reimbursement of Costs by the Estate:
5. Alternatives to Appointing an Executor:
An alternative to appointing an executor is the appointment of an estate administrator. The estate administrator is responsible for managing the estate of a deceased person and has similar duties to an executor. However, unlike an executor, the estate administrator is not required to follow the deceased's specific instructions but is instead obligated to manage the deceased's assets in the best interest of all heirs.
Another option is the appointment of an executor committee. In this case, multiple individuals are chosen by the heirs to jointly assume the responsibilities of an executor. This has the advantage of allowing the estate’s affairs to be considered by several people, and the burden of responsibility is not placed on a single individual.
A third alternative is the establishment of a testamentary disposition, such as a Berlin Will. This document outlines the succession and distribution of the estate in advance. It only takes effect after death and supersedes the statutory inheritance law. However, it is important to note that a testamentary disposition is only effective if it is created by a notary and complies with specific formal requirements.
In many cases, if no certificate of inheritance is available, the inheritance rights must be clarified through an inheritance certificate procedure.
6. Conclusion
Is an Executor Necessary?
Whether it is beneficial to appoint an executor depends on individual circumstances. In some cases, having an executor can be helpful to ensure that the deceased's final wishes are properly carried out.
In other cases, heirs or other parties may be capable of handling the responsibility themselves. It is important to carefully consider whether an executor is needed and, if so, to select a trustworthy person for this role.
Here are some potential advantages and disadvantages of appointing an executor:
Advantages:
- An executor can ensure that the deceased's final wishes are properly carried out.
- An executor can act as an "impartial mediator" in case of disputes among heirs.
- An executor can manage the assets and fulfill the deceased's obligations, reducing the burden on the heirs.
Disadvantages:
- Appointing an executor requires additional planning and costs upfront.
- Appointing an executor may lead to conflicts among heirs, especially if the person chosen is not considered suitable by everyone.
- An executor may not have enough time or resources to fulfill their responsibilities adequately.
- An executor might act improperly or enrich themselves unlawfully, potentially leading to legal disputes.
Our Recommendation for Choosing a Suitable Executor
Choosing the right executor is crucial as this person plays an important role in executing the will and managing the estate of the testator. Therefore, it is advisable to carefully consider who to appoint as an executor.
A good choice is usually someone you trust and who has the necessary skills and knowledge to carry out the task. It may also be beneficial to appoint multiple people as executors to ensure that someone is always available to perform the duties. If you are unsure about whom to appoint as an executor, consulting with a lawyer can be helpful.
What Does It Mean to Be an Executor?
An executor is a person appointed in a will who is responsible for carrying out the instructions of the testator. This can include ensuring that the testator's assets are distributed according to their wishes after death or performing specific tasks on behalf of the testator. It is important to note that the executor is not an heir and is solely responsible for executing the instructions in the will.
An executor is a person named in a will who is responsible for carrying out the testator's instructions. This can include ensuring that the testator's assets are distributed according to their wishes after their death or performing specific tasks on behalf of the testator. It is important to note that the executor is not an heir and is only responsible for executing the instructions in the will.
The Liability of the Executor
The liability of an executor is regulated by Section 1981 of the German Civil Code (BGB). According to this provision, the executor is liable for damages resulting from a breach of duties imposed on them in their role as executor. This includes the duty to manage the testator's assets carefully and distribute them according to the instructions in the will.
If the executor breaches these duties and causes damage, they can be held liable. It is important to note that the executor can be held liable even if the damage was not caused intentionally but through negligence or oversight. In such cases, affected parties can claim compensation for damages against the executor.
