7 Common Executor Mistakes (and How to Avoid Every One)

Executor mistakes range from minor paperwork errors that cause delays to serious breaches of fiduciary duty that result in personal liability. Most mistakes aren't intentional — they happen because executors are grieving family members thrust into an unfamiliar legal role. Here are the seven most common, and how to avoid them.

Mistake 1: Paying Debts Before Filing Inventory

Many executors start paying bills as soon as the estate account is opened, before completing the inventory. This can result in paying unsecured creditors first, leaving insufficient funds to pay priority creditors (taxes, secured debts) or to make the distributions the will requires. Complete the inventory first, prioritize the debts, then pay in the correct order.

Mistake 2: Commingling Estate Funds

Using the estate account for personal expenses, or depositing estate funds into your personal account, is a classic breach of fiduciary duty — even if you intended to reimburse the estate. Open a dedicated estate account before receiving any estate funds and never let the accounts mix.

Mistake 3: Distributing Assets Before Debts Are Paid

Distributing assets to beneficiaries before all debts and taxes are settled is one of the most serious mistakes an executor can make. If there aren't enough funds to satisfy creditors after premature distributions, you may be personally liable for the shortfall. Wait until the creditor notice period has expired and all known debts are resolved.

Mistake 4: Ignoring Out-of-State Assets

Real property located in another state requires an ancillary probate proceeding in that state. Many executors don't know this and simply handle the in-state estate, leaving out-of-state property in limbo. Check whether the decedent owned any out-of-state real estate early in the process.

Mistake 5: Missing Tax Deadlines

The decedent's final personal tax return is due on the normal filing date (April 15 for calendar-year taxpayers). The estate income tax return (Form 1041) is also required if the estate has gross income over $600. Federal estate tax returns (Form 706) are due nine months after death for estates above the exemption threshold. Missing these deadlines results in penalties and interest.

Mistake 6: Neglecting Digital Assets

Email accounts, cryptocurrency wallets, PayPal balances, online brokerage accounts, and domain names are estate assets. Many executors don't think to look for them and they simply go unclaimed. Review the decedent's devices, email inbox, and password manager for financial accounts.

Mistake 7: Keeping Beneficiaries in the Dark

The single biggest driver of beneficiary complaints and lawsuits isn't mismanagement — it's lack of communication. Send periodic updates, even when there's nothing significant to report. Acknowledge that the process is taking time and explain why. Beneficiaries who feel informed are far less likely to hire an attorney to force an accounting.