I was recently named executor of a friend's will. At the time of his passing, I believed the estate was quite small and potentially insolvent as his bank accounts held only about $80. As a close friend, I chose to cover his funeral expenses personally without assessing the full scope of the estate.
Three months later, I discovered that he held shares valued at approximately $10,000, which could be liquidated. I had also paid off his credit card debts under the assumption that the estate had no assets.
Now I am considering whether I should seek reimbursement for the funeral and debt payments. I understand that funeral expenses typically take priority over other debts, but I am concerned about potential creditor claims. Technically since I cannot distribute an insolvent estate, is this actually classed an estate distribution or not?
Or have I screwed up and I take the L and distribute the funds from the shares to the beneficiary? Or if I was going to do this, alternatively should I try to reimburse myself and then gift an equivalent to the beneficiary from my own funds?
Would it be advisable to file a notice of intention to distribute the estate, even if I am only reimbursing myself, to ensure proper protection and transparency.
The total funeral costs were $18,000 and the beneficiary listed on the will helped to plan it.
The question is I have now is whether this amount which is a reasonable amount for a funeral. I believe it was but the creditors if any exist might believe cremation for sub $2,000 is more acceptable… I do not think there will be any further creditors as my friend had no borrowing capacity and I'm surprised he had a credit card, but you never know in this crazy world.
Have you guys been through something similar and what were your experiences?
I'm leaning more towards not taking the reimbursement, but also wondering if there might be a better way to protect the beneficiary because I don't want to go through all this and then for some random debt collector to suddenly appear making my efforts pointless, i.e. both myself and the beneficiary is out of pocket for no apparent reason except my hubris.
Sounds like you didn’t take executor training