By Susan Spann
Last month, my guest blog here at Writers in the Storm looked at some of the duties a literary executor performs [But What Does a Literary Trustee DO? (Part 1)] in the course of his or her duties. Today, we’ll finish up with a look at the executor (or trustee)’s other duties: long-term estate administration, distribution to beneficiaries and heirs, and resolution of estate-based conflicts.
Remember, we’re looking only at functions of a literary executor or trustee – a general executor (or trustee) will have additional duties (again, consult an attorney to find out more). Also, these functions are common to both executors and trustees, so although there are some differences between them, each will have to perform these duties: trustees when there’s a trust involved and executors when they’re acting on behalf of an author’s probated or non-probated estate.
LONG-TERM ESTATE (or TRUST) ADMINISTRATION
Once the estate is opened or the author’s trust is being administered by the successor Trustee named to act after the author’s death, and after the assets have been collected and a preliminary accounting accomplished, the executor or trustee will need to create a plan of distribution outlining when, and how, each of the author’s literary and intellectual property assets will be managed and, as appropriate, distributed to the beneficiaries named in the author’s will or trust.
In the case of a simple will or trust, the assets are usually distributed fairly quickly so no long-term administration is required.
When the author’s estate plan includes “life estates” (a situation where one person receives the income from an asset for his or her life and someone else receives either the income or ownership of the asset after the “life tenant” dies) or long-term instructions, however, the trustee or executor will need to manage some or all of the assets for an extended period of time. In most states, this means the executor will need to produce regular accountings of the trust assets and reports or other informational statements to tell the beneficiaries about the financial status of the trust (or estate). This usually requires the help of an attorney, and often also an accountant familiar with trust and estate accountings.
Seem confusing? It can be.
Before creating long, complex estate plans, be sure to consider these issues:
1. Your named executor or trustee will need the business skills to handle long-term management and accounting of your literary assets.
2. Long term estate or trust administration usually requires the help of an attorney and an accountant, so make sure your estate generates enough income to cover those costs as well as providing income for your beneficiaries.
3. Most of the time, heirs do better with simple plans that avoid the costs and complexities of long-term estate administration.
DISTRIBUTION TO BENEFICIARIES AND HEIRS
When the will or trust contains instructions for assets to be distributed directly to heirs or beneficiaries, the executor or trustee will follow a three-step process:
1. Create a distribution plan showing how the individual assets will be distributed or transferred to the named beneficiaries. If necessary, the executor or trustee will have this plan approved by a court, though most trusts don’t require court supervision.
2. Distribute the assets to the beneficiaries (after court approval, if required) and obtain signed receipts from each beneficiary acknowledging receipt of the proper assets.
3. Perform a final accounting and close the trust or estate. Sometimes this requires court supervision or approval (particularly in the case of an estate). Sometimes the estate or trust involves both short-term and long-term administration, in which case the executor or trustee will distribute some assets fairly quickly and then manage the rest of the assets over time.
RESOLUTION OF ESTATE-BASED CONFLICTS
Whether the estate involves only short-term administration and distribution, a combination of short and long-term duties, or a long-term administrative obligation, the executor or trustee will need solid conflict-resolution skills.
Sometimes conflicts arise between the various beneficiaries, either with regard to management of the various assets or to the way the assets are divided and distributed.
Sometimes the executor or trustee needs to negotiate deal terms, either with pre-existing publishers or with publishers and others who want to publish the author’s works for the first time after the author’s death.
In either case, the conflict usually resolves more easily, and with better results, if the executor or trustee has the skills to work with people and defuse tensions.
Literary executors and trustees have other duties, also, which may vary with the scope and contents of an author’s estate or trust. However, the duties we’ve looked at this month and last month give a fairly accurate summary of the standard obligations.
As a rule of thumb, the more complex your estate or trust, the harder your executor or trustee will need to work – so keep that in mind while planning your estate.
Next month, and appropriately as we enter the holiday season, we’ll take a look at the flip side of author estate planning: how to choose who inherits your creative works.
Have questions? Please feel free to ask in the comment section – I’d love to hear from you!
Susan Spann is a publishing attorney and author from Sacramento, California. Her debut mystery novel, CLAWS OF THE CAT (Thomas Dunne Books, July 2013), is the first in a series featuring ninja detective Hiro Hattori. Susan blogs about writing, publishing law and seahorses at http://www.SusanSpann.com. Find her on Twitter @SusanSpann or on Facebook.
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Thank you Susan, for making me think about this. I'm thinking that maybe my literary trustee needs to be a different person than my executor...hmmmm. Something to think about. Thanks for looking out for us!
I think Laura is right. Think we need someone like you, Susan.
Glad to be of assistance, Laura - and yes, sometimes it works out better to have a different literary executor if the general executor doesn't know much about copyright and intellectual property issues.
Susan, I appreciate your explanations as to the very serious considerations here. I must admit to my eyes glazing over at the duties involved. I'm not sure who to even ask or appoint or dump these duties on, as a result. But I'll read all your info again (I've been saving your posts and sharing with my hubby) and mull this over. Thanks again!
I admit, the legalese can be overwhelming. One reason I wanted to get these posts out there was to make sure people had some idea of what they were asking the executor to do. A lot of times, people name an executor without really understanding the scope of the request - or what it is that they want the relative to accomplish. Hopefully, even though it's a little confusing, this also helps create a checklist of skills the executor will need. I hope that helps make the choice easier!
I just found out there are companies that can serve as executors. If the service isn't used there is no charge. Apparently Arizona has a good certification systems for these people. I have no close relatives and no friends geographically close or age appropriate with the means to handle the task. Still investigating and looking for information.