The Executor of your will undertakes an important job and is responsible for managing and administering your estate. Few are often prepared for this job, but with the help from the right law firm the executor’s job can easily be managed.
What is An Executor?
Before jumping into what an executor is responsible for, let’s first talk about what their role is. The executor is the person that you name in your will to carry out your last wishes. Their role is to offer the will for probate in the local court and take action to gather and distribute the assets in your estate. The person you choose as your executor can be almost anyone, but typically is a family member or close friend. Above all, your executor should be someone you trust to manage your estate.
The executor can have many different responsibilities depending on the size and nature of the estate and the types of beneficiaries and distributions under the will. Let’s take a closer look at the top five responsibilities of an executor.
#1 – Filing the Probate Petition
The executor must locate the decedent’s original will after their passing. In addition, the executor will need an original death certificate in order to complete the probate petition and file it with the court. Depending on the jurisdiction that the decedent died in, there may be some additional paperwork required for probate like the receipt for the funeral.
#2 – Gather, Value & Protect the Estate’s Assets
In order to know the value of the estate and the types of assets that the executor is responsible for managing, the executor will need to inventory all of the estate’s assets. The includes bank accounts, personal property, real estate, and other financial holdings. Sometimes the executor may not know all of the estate’s assets at the time the will is offered for probate. If this is the case, the executor may have to wait until they are issued letters testamentary and the authority to contact financial institutions or other organizations to investigate what other estate assets may exist. It’s important that the executor make a thorough inventory of the estate assets to ensure that everything is accounted for.
The executor also needs to value the estate’s assets. The date of death value may be easy to determine if the assets are financial accounts. However, if you are dealing with shares of a business or real estate, you may have to get a formal appraisal.
Protecting the assets looks different depending on what the asset is. If it’s a bank account or investment account, it’s important to contact the financial institution to notify them of the death and ensure that there is no fraudulent or unauthorized activity. If the estate owns real estate then it is important to make sure the property is secure, i.e. winterize the home, lock the doors and windows, and check on the property regularly.
#3 – Pay the Debts of the Estate
Many times it will be easy for the executor to ascertain what debts are outstanding. This may include funeral and burial expenses, utility bills to maintain real estate, medical bills, or outstanding credit card bills. However, sometimes creditors come forward and file claims against the estate for outstanding debts that the executor may not be aware of. When this happens, it’s important for the executor to review the bill and determine whether it is a legitimate outstanding debt that is owed. The executor is also responsible for preparing and filing tax returns, including the income tax return for the year the decedent passed away and the estate’s tax return.
#4 – Managing the Estate’s Costs
The tasks involved in managing an estate can look very similar to tasks that a person does when they are alive. The executor would need to make sure that the estate has a bank account and that the estate’s bills are paid and the property is maintained. As part of this, it is also important that the estate’s assets are not going to waste. For instance, it is the executor’s responsibility to make sure that services that are not being used are canceled. For example, the decedent’s gym membership or cable subscription and cell phone account.
#5 – Distributing the Estate’s Assets
Once the executor has inventoried and valued the assets, paid all of the estate’s debts, and received letters testamentary, they can now begin to make distributions to the beneficiaries according to the instructions in the will. However, before this is done, it’s important to have each beneficiary sign a receipt and release to acknowledge the distribution and release the executor from any liability.
Are you an executor of an estate? Do you feel overwhelmed or need some extra help navigating the probate process? Let us help! We help executors get through the probate process from start to finish. Contact us to schedule a free consultation!