Communicating with Beneficiaries

Do you know what an executor has to tell the beneficiaries of the will?

If you are the executor of an estate, you have a duty to provide information about the estate to the beneficiaries, but how much do you have to tell them?  Not very much as it turns out.

You have to notify the beneficiaries that the probate has been opened; you’ll need to ask them to sign receipts when you make distributions; and, in the end, you need to notify them that you plan to close the probate.  There are situations in which you may need to give additional notice, but they’re not that common.

Along with the information that you have to share, there is some additional information that you have to provide if a beneficiary asks for it.  If asked, you have to provide an inventory of the assets in the estate as of the date of death.  While an inventory is usually not too onerous to prepare, a beneficiary can also ask for an accounting of how you administered the estate.  If the probate has been open for more than one year (and many probates take more than a year to complete), a beneficiary who hasn’t received his or her full bequest can ask the court to order you to give an accounting.  You’ll need to show where every penny went.  What did you pay the lawyer?  Did you hire an accountant?  If so, how much did you pay that person?  Did you take a fee as executor?  What did you do to earn it?  Which beneficiaries got what?  Accounting can be expensive and time-consuming.  It’s much simpler to share the information voluntarily.

Now that we know what you have to tell the beneficiaries, what else should you tell them?  As a general rule, the more you tell the beneficiaries, the better.  Like anyone else, a beneficiary who is kept in the dark could assume that you’re up to something.  Let them know what’s in the estate, what you’re doing, and when you’re going to do it.

For example, you should give the beneficiaries a copy of the will.  When you opened the probate, you had to file the original will with the court, which made it a public document.  While the beneficiaries can simply get a copy of the will from the court, making them go to that extra step creates an appearance that you want to keep the will from the beneficiaries.

It’s also a good idea to let the beneficiaries know when you plan to make distributions from the estate.  You may have good reasons to wait to make distributions, such as resolving creditor claims, selling a property, or filing tax returns, but the beneficiaries only see that you are sitting on their money month after month.  Giving them a timeline prevents a lot of suspicion.

Even when everything is running smoothly, being an executor is a big job.  Keeping the beneficiaries on your side makes it much easier.