Executor's Liability Case Study

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Memorandum on Executor’s Liability Question: What Liability does an executor of a will personally have if they sign a contract guaranteeing the payment of rent (from new tenants) of a lease transfer? Short Answer: The executor can guarantee the rent payments for a lease transfer if they personally take on the responsibility for a new contract. The estate does not have a liability to make payments that the executor guaranteed of the new tenants. Facts: An estate now is in possession of a business and lease. The executor wants to sell the business and transfer the lease over to new owners. However, the landlord will not agree to transfer the lease to the buyer without the executor signing a guarantee of payment for rent under the new tenants. The executor wants to know the liability of …show more content…

If an executor distributes assets to beneficiaries before paying off all debts on the estate, the estate’s creditors can assert personal liability against the executor for the decedent’s debts. If the executor competently handles the estate and does not negligently distribute assets to beneficiaries before paying off debts, then the executor cannot be personally liable for any subsequent claims. However, if the executor is found to have managed the distribution of the will improperly and distributed assets before paying off all necessary debts, then they can be held personally liable to creditors of the estate. N.J. Stat. Ann. § 3B:14-35 (West) The executor can distribute estate assets to beneficiaries only after debts and taxes are paid. The executor follows the instructions laid out in the will, or if no will, turns to state law to determine who inherits through intestacy. When the executor or administrator has paid all debts, filed the required tax returns, and distributed all the estate assets, the court will relieve the executor of his or her

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