Being appointed executor of an estate is both a privilege and a responsibility. Before assuming this role, it’s crucial to have a comprehensive understanding of the obligation at hand.
In essence, your responsibilities will include the distribution of the deceased individual’s assets and the facilitation of settling estate debts and expenses.
Roles and Tasks of an Executor
An executor has the legal responsibility to handle the financial affairs of a deceased person. It includes ensuring that taxes and debts are paid, and assets are distributed accordingly.
State laws vary regarding the qualifications of potential executors, but executors are typically chosen from the close family circle, such as spouses, children, parents, and siblings.
Even though state laws allow for the payment of an estate executor, many executors, mainly when they are close family members, often choose not to seek compensation.
Additionally, besides carrying out their duties diligently, impartially, and honestly, an executor may also be required to perform various tasks, including but not limited to:
1. Reviewing the Will and Determining Inheritance
The executor must obtain a copy of the will and submit it to the nearby probate court. The executor’s responsibility includes finding, reviewing, and comprehending the will.
In most cases, even if the formal probate process is not required, the will must still be submitted to the probate court. During this stage, the executor also identifies the individuals entitled to inherit the assets.
2. Informing Related Agencies of the Deceased’s Passing
The executor of the estate should notify various entities, such as the Social Security Administration, the decedent’s bank, and credit card companies, about the individual’s death.
3. Determine the Type of Probate Required
Not all assets require probate due to inheritance laws, which may allow specific properties to pass without this legal process, particularly those jointly held by spouses.
Additionally, estates of lower value may qualify for a simplified procedure. If probate is deemed necessary, the executor must file a petition with the court to secure their appointment. It is advisable to seek the guidance of an attorney for this undertaking.
4. Establish a Bank Account for Incoming Funds and Cover Ongoing Expenses
The executor of an estate also needs to work with the bank. If the deceased is owed money, like incoming paychecks, this account can be used to manage those funds.
The executor should also watch for outstanding bills, such as mortgages and utilities, that must be paid during the probate proceedings.
5. Act as the Estate’s Legal Representative in Court
The executor might need to attend court proceedings to represent the estate.
Factors to Ponder Before Accepting the Role of Executor
Accepting the task of an executor is a more significant decision than many people initially realize. It’s crucial to understand the position’s responsibilities before committing to it. Here are vital aspects to know before agreeing to become an estate executor.
Estate Complexity
Being an executor or a personal representative is more than just following a will’s instructions for giving out assets. Executors step into the shoes of the person who wrote the will, handling all aspects of their final matters, financial and otherwise.
The larger the estate in terms of properties, assets, possessions, or beneficiaries, the more complex and time-consuming the process becomes.
For example, distributing a house, bank accounts, stocks, and personal items involves specific steps and potential challenges, including taxes. It is why people with high net worth often hire estate executors to create and execute their estate plans.
However, even smaller estates with few beneficiaries can become tricky if someone contests the will or adds complications. To gauge the complexity of the role, it’s wise to examine the current will (or a draft if it’s in progress).
If you encounter apparent issues, like unequal distributions among children, complex trusts, or challenging annuities, think twice about taking on the responsibility.
Time Commitment
Being an executor is a detail-oriented role that demands your time and focus. Ensure you have the time before accepting this responsibility, especially if your life is busy with work or family commitments.
You can be added or removed as the executor of an estate while the testator is alive and seek help from a co-executor or professionals. However, you can’t appoint someone else once the testator has passed.
Living far from the testator or relocating may require traveling to handle estate matters. Periodically review your decision, especially when your life circumstances change significantly, as it’s common for testators to change executors over time.
Immediate Duties
Some individuals accept the role of executor, assuming it will only involve work for a while. Yet, performing the job effectively requires an immediate start. You must be prepared because your legal obligations might be needed.
Responsibilities After Testator Passes Away
The real work begins after the testator’s passing.
As an estate executor, your tasks encompass funeral arrangements, locating and filing the will, notifying creditors, handling probate, managing assets, settling debts, filing tax returns, establishing and managing trusts, addressing legal challenges, and more.
Being an executor requires meticulous organization and attention to detail. Even if you’re not naturally inclined this way, the estate can cover reasonable expenses for professional assistance. Nonetheless, your involvement will still be essential at every stage.
Executor Compensation
The payment method for executors varies per state laws, including hourly rates, fixed fees, or a percentage of the estate, often determined by the probate court.
In addition to the standard executor of estate fees, an “extraordinary fee” may apply for extensive tasks like selling property or handling legal matters. The testator’s will can override state law regarding payment preferences. Executors are eligible for expense reimbursement.
Get Thorough Guidance From the Expert
To be a successful executor, it’s essential to have a solid understanding of the responsibilities involved. Managing an estate involves intricate tasks that demand careful attention.
Consider collaborating with Cristy J. Carbón-Gaul, a seasoned estate planner, for expert guidance and efficient handling. Her wealth of experience ensures effective management and fulfillment of the executor of estate role.
Avoid taking on this role unprepared — consult with Cristy for the peace of mind and effective estate management you need.