Executor Duties

Your Step-by-Step Guide to Closing an Estate

What is an Executor?

An executor, also called a personal representative, is an individual who is chosen to carry out someone’s estate plans after death.

Being Chosen as an Executor

When a person creates a Last Will and Testament, they are referred to as a testator (male) or testatrix (female). The testator/testatrix must appoint at least one executor to administer their estate. There may be more than one executor, in which case they are referred to as co-executors.
It is an honor to be asked to be someone’s executor or co-executor, as you are being entrusted to settle their affairs, clear their debts, and divide their remaining assets among beneficiaries after their death.
Before accepting this position, it is wise to consider the scope of responsibilities and the role you will need to fill upon this person’s passing, especially if you have never been named as an executor before.
If a testator/testatrix has asked you to be their executor, you are not legally obligated to accept if you do not feel comfortable doing so.

Understanding Executor Responsibilities

Being an executor is no small task. On the occasion that you accept this position, talk with the person who has appointed you, and discuss their end-of-life wishes in order to act in their best interests after death.
You will be expected to complete an array of tasks as an executor. The extent of these duties will depend on the complexity of the estate, as well as:
  • Your knowledge of certain matters, including finance and business, or your capacity to oversee professionals tending to these matters.
  • Your ability to devote time and energy to fully settle all debts and inheritances. An executor’s commitment may take up to a year.
  • Your ability to make difficult decisions, act objectively, and deal with family and beneficiaries in such a way as to avoid or mitigate potential inheritance conflicts.

Executor Expectations:

  • Carry out the testator’s estate plans
  • Follow instructions in a Last Will and Testament
  • Work with family, beneficiaries, and professionals, if needed
  • Manage finance, legal, and/or business matters

In relation to your responsibilities as executor, you may be entitled to reimbursement from the estate for your time and any expenses that you incur. If you choose to consult with an estate lawyer, any legal fees that are incurred may also be deducted from the estate.

Settling an Estate

When the testator passes away, your executor duties begin. While it may seem quite overwhelming, this person has elected you because they felt you were capable of executing their wishes, and managing their estate after death. The ultimate tribute is seeing to your loved one’s estate plans with respect, fortitude, and commitment.
The order of your responsibilities may be subject to the individual’s estate that you are in charge of, but your first step after death is to immediately locate their will.

Step One: Find the Will and Review its Contents

The deceased should have informed you where they kept their will (e.g. in a safe, safety deposit box, or with a lawyer). After locating the will, you may wish to contact a lawyer to assist with the estate. If you are certain you can manage your duties without professional legal help, you can proceed to arrange for probate yourself.
Probate rules vary by state, but filing for probate is intended to confirm that the deceased’s will is valid and the executor is authorized to continue with his or her duties.
Probate may not be needed for smaller estates, but you must still file the will with the court.
Whether or not a will passes through the court’s probate procedure depends on the state the will is going to be executed in, as well as the value and size of the deceased’s assets after non-probate assets are deducted. A lawyer may be the best resource to find out if the deceased’s estate will be subject to probate.

Summary:

  • Locate and review the will with a lawyer
  • Determine if probate is necessary
  • File the will with probate court

Step Two: Make Funeral Arrangements

Prepare funeral arrangements if they have not already been preplanned or assist loved ones with these preparations.
If the deceased left behind any minor children or pets, it’s important to arrange for guardianship as dictated in their Last Will and Testament and provide support to the family during this time.
Most funeral homes will apply for a death certificate as legal proof of death. Obtain a copy of the death certificate, as it will be needed to verify the testator’s death for financial, insurance, and probate purposes.

Summary:

  • Make remains arrangements (cremation, burial, organ donation, etc.)
  • Plan funeral
  • Arrange for guardianship of minor children and/or pets
  • Obtain death certificate

Step Three: Secure Assets

It is your duty as executor to protect and secure the deceased’s assets, including a safety deposit box if they have one, and all real estate, business interest, vehicles, and goods that they owned.
Once you have taken control of the assets, your next steps may be as follows:
  • Keep assets safe by insuring valuables or property
  • Conduct an inventory of items and get an appraisal, if needed. Determine if there are any non-probate assets included in the estate (such as trusts). This is property that can be transferred outside of the probate court.
  • If assets are held jointly, you may arrange for the transfer of property to the surviving owner
  • Notify beneficiaries as per your state requirements

Step Four: Manage Finances

Your loved one’s accounts will need to be closed, and all subscriptions, credit cards, and specific utility bills (phone, cable, etc.) cancelled. All other parties, such as banks, brokers, tenants/landlords, doctors, post office, Social Security Administration, and more will need to be informed of their death.
At this stage, you can open an estate account to manage the deceased’s debts and assets. If applicable, you may collect life insurance, Social Security, or any other money owed to the deceased, such as wages or dividends, and deposit these funds into the account. You would then continue to pay all outstanding debts, such as mortgage or insurance bills.
When you are managing the deceased’s financial accounts and assets, you may wish to enlist the help of a professional accountant, whose costs may be covered by the estate.
It is important to follow the testator’s wishes regarding specific gifts or property. For example, gifted items should not be sold to cover the deceased’s debts, such as selling a classic car that was intended to be passed down to a nephew.

Summary:

  • Cancel credit cards, bills, and subscriptions
  • Freeze accounts and terminate contracts
  • Inform banks, brokers, landlord, tenants, doctors/health care professionals, post office, Social Security Administration, and employer/employees of the testator’s passing
  • Open estate account
  • Collect benefits or outstanding payments
  • Give notice to creditors and determine if claims are valid
  • Sell assets or property if necessary
  • Pay outstanding debts (including funeral costs)

Step Five: Wrap up the Estate

After you have finished paying all of the deceased’s outstanding debts, you can begin wrapping up the remainder of their estate, including paying all professional fees (such as lawyer, accountant, etc.) as well as collecting any executor fees.
As the executor, you will need to file the last income tax return for the deceased, pay estate taxes, and file the necessary state and federal estate and/or inheritance tax returns if required.

Step Six: Disperse the Estate According to Will

The remaining portion of the estate (what is left after the deceased’s debts are cleared) needs to be dispersed to the beneficiaries as outlined in the Last Will and Testament. First, deliver any specific gifts to individuals or organizations, and then the remainder of assets, referred to as the residue of the estate, will need to be dealt with according to the distribution schedule outlined in the Last Will.
It’s important to carefully follow the will when allocating the estate to the beneficiaries. Conflicts over inheritances are common among grieving relatives. Ensure you have properly divided the estate as the deceased intended.

Summary:

  • Protect all assets until they are ready to distribute
  • Donate to organizations or charities if called for
  • Deliver gifts to individuals named in the will
  • Divide remaining estate among beneficiaries as specified in will

Step Seven: Close the Estate

Once all the assets have been dispersed, you can begin closing the estate by organizing all records, including receipts for final accounting purposes, and filing them accordingly. The estate bank account can then be closed.
At this point, you will need to provide the beneficiaries with a statement of accounts, and file for tax release by the probate court, whereby you will be released of your executor duties and the estate will be officially closed.

Summary:

  • Organize and file all receipts, records of activity, and evidence of disbursements
  • Close estate account
  • Provide beneficiaries with statements of estate activity
  • File for tax release by the probate court

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Fulfilling Your Executor Duties

As an executor of a loved one’s estate, you are given the task of helping someone you care about. Before agreeing to take on this role, you should evaluate the responsibilities to make sure you can fulfill the necessary duties during this time of grief. Once you understand what is expected, the decision is yours to make.
If you intend to commit to this responsibility, talk to the testator/testatrix about their estate planning goals, and how they would like their estate plans carried out. Discuss as many topics as possible to ensure that you fully understand their wishes and your level of responsibility.

Questions to ask the testator after you’ve been appointed executor:

  • Where is your will located?
  • Where do you keep important documents, such as property deeds, marriage certificates, insurance policies, etc.?
  • Are there co-executors? Did you designate an alternate?
  • Who are your other representatives (health care proxy and/or attorney-in-fact)?
  • Do you have a list of all your accounts and corresponding information? Where is this list located?
  • Are there any specific valuable assets or trusts I should be aware of?
  • Who are your beneficiaries?
  • What kind of funeral arrangements do you prefer? Did you include preplanning arrangements in your will or with a funeral home?
  • Do you have a lawyer or an accountant that you want to assist with your estate?
  • Are there any other instructions I should know about?

It is quite likely the person who appointed you has great faith and trust in your abilities. If you are chosen in part with another individual as co-executors, communicate with this person (or persons) to ensure you are all on the same page, and can work together when the time comes.
When the testator passes away, you are assigned an honorable responsibility. Keep beneficiaries involved in the process, and work with co-executors to commemorate, appreciate, and celebrate your loved one with great dignity.
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