Being the executor of an estate is a huge responsibility that can be cumbersome and time-consuming. Understanding an executor’s duties and what needs to be done can help reduce undue stress during emotional times.
An executor is an individual, bank or trust company named in a deceased person’s will who is tasked with carrying out the deceased’s wishes and settling the estate. Depending on the state, an executor may also be called the “personal representative” or “administrator” of the estate.
After someone dies, there are many financial responsibilities and legal matters that need to be taken care of. A death certificate has to be filed, funeral expenses and outstanding liabilities have to be paid, property needs to be distributed to the heirs and many other tasks need to be completed before the estate is closed. The executor is the person legally responsible for handling many of these duties.
If someone dies without a will or the will does not name an executor, the court will appoint someone to handle the affairs of the deceased.
What does it mean to be someone’s executor?
An executor is legally bound to carry out the wishes of the deceased in accordance with the will (if any) and to act in accordance with state laws.
The executor is responsible for distributing the remaining assets of the estate to the rightful heirs. If the administration of the estate requires probate court proceedings, the executor must handle that as well. An executor is allowed to hire a probate attorney to handle these proceedings, but this usually depends on how complex the estate is. If you have been named as executor of a large estate or the estate contains complex assets such as commercial real estate or business ownership, it may be beneficial to hire an experienced professional.
Who is the best person to be your executor?
You can name someone close to you or an institution as the executor of your estate. Generally, an executor should be someone you trust: a family member, a close friend, or perhaps a lawyer or an accountant with whom you have a history.
Many states have laws that prevent certain people from becoming executors. For example, minors, convicted felons or persons living in another state may be barred from acting as executor. Check the specific rules for your state before naming an executor in your will.
In some cases the executor named in the will may be unable or unwilling to perform his duties. In that case, another family member may volunteer to take over the duties of the executor, or the court may appoint one. If you choose to accept the role as executor, you may also resign from the position at any time.
What are the duties of an executor?
An executor’s responsibilities vary by state, but regardless of residency, the most important part of being an executor from a legal perspective is fiduciary responsibility. This means that an executor must at all times act in the best interests of the estate, and failure to do so can lead to a lawsuit.
Additional responsibilities of an executor include:
Filing of Death Certificate and Will. The executor is responsible for coordinating with funeral directors and medical examiners to obtain a copy of the death certificate; The executor will probably need to prove that they have the authority to act on behalf of the estate. The executor must also track down a copy of the decedent’s will and then file the will and death certificate with the probate court to begin settling the estate.
Notifying beneficiaries and creditors. The executor must notify the beneficiaries (if any) and creditors named in the will that the person has died. Creditors have a limited amount of time to file claims against the estate for outstanding debts. If they do not file a claim within the allotted time limit, they do not have legal recourse to claim the money from the estate.
Valuation and maintenance of property and assets. The executor must track down the estate and appraise the decedent’s property as well as file an inventory with the court. In many cases, the executor will hire someone to appraise the estate.
To handle ongoing expenses. It can take months for the property and assets of the deceased to be transferred to the new owner. Meanwhile, the estate must pay such things as mortgage payments, utility bills and other monthly expenses, and the executor is in charge of handling these bills. An executor may set up an estate account with a bank or financial institution to ensure proper payment of these expenses. If payments are owed to the decedent (for example, a final paycheck or life insurance payment that lists the estate as a beneficiary), the executor deposits these funds into the estate account.
Paying off outstanding loans and taxes. If creditors file claims against the estate, the executor is obligated to use funds from the estate to pay the debts or dispute the claims. The executor must also file a final tax return for the decedent and pay taxes owed.
Work of distribution to the beneficiaries. Once all debts and taxes have been paid, the executor is in charge of handling distributions from the estate to beneficiaries and heirs in accordance with the will and state laws.
How much time does an executor take to dispose of an estate?
Being the executor of an estate can be an honor, but it can also be a burden. Even straight estates can take months to close. If the condition becomes complicated, it can take years.
If you’re considering doing some estate planning, talk with anyone you’re considering naming as an executor to make sure they’re up to the task. And before agreeing to be someone’s executor, make sure you understand the responsibilities.