If you’re like most people, you’ve probably heard the term “executor” used when talking about wills or estates. But what exactly does an executor do? The person who has this title will have an important job, the first of which is to ensure that a loved one’s wishes are respected. Read on for some more details on the specific responsibilities and duties of the executor of a will.
Legally, the term “executor” is defined as an individual who oversees the disposition of possessions and property. This is the person who will divide up your loved one’s items. For legal purposes, “property” can also include financial assets and real estate. In other words, this is the person legally entrusted to make sure an individual’s last wishes are carried out as desired. The “individual” doesn’t have to be a family member. It’s not unusual for someone without close relatives to choose a trusted friend to be the executor of their will. In some situations, the executor is an attorney.
Acting In ‘Good Faith’
While an executor might be a lawyer, as mentioned above, there is no legal requirement for an executor to have any legal knowledge of experience. The only legal stipulation is that an executor must act in good faith, or be honest in the execution of their duties (the legal term is “fiduciary duty”). This means they will act in good faith based on what the person’s wishes are as stated in their will.
Financial Compensation of Executors
Legally, an executor is not entitled to receive any proceeds from the sale of property or any assets that are part of the estate, although it’s not unusual for an executor to be granted certain possessions or assets by the individual who made the will. However, most states do mandate that an executor be paid a reasonable fee for their efforts. Such a fee will be based on available assets and the overall complexity of the will.
Responsibilities of a Will’s Executor
In addition to ensuring that Uncle Max gets the coin collection and Aunt Minnie gets the antique clock, the executor of a will also ensure that debts to creditors are paid. Depending on what assets are available, this may involve completely paying off debts or making payment arrangements. Debts will be paid first before any distributions of property take place as per the decedent’s wishes.
Searching for and Managing Assets
An executor is also responsible for finding all available assets referenced in the will and keeping those assets safe until everything is distributed. They may also determine what assets to sell if there aren’t enough available cash funds to cover debts and what to keep. For instance, an executor may opt to sell an unused piece of property to cover debts will electing to hang on to collectibles likely to have sentimental value for whoever receives them.
Determining Whether or Not to Probate a Will
“Probate” is the legal proving of a will in court. Probate is sometimes necessary if there are doubts about the validity of a will, including whether or not it is a legitimate will the person actually signed. Decisions about probate will also depend on the laws of each state concerning such matters. For instance, probate is sometimes legally required when large estates are involved or if there are significant assets.
Contacting Everyone Named In a Will
The executor will need to contact everyone named in the will. They will also be in charge of making sure everyone gets what was left to them in the will. The method of contact can be with a formal letter, phone calls, or with a special gathering of all named individuals in a will.
Filing the Will In Probate Court
Most states require that a will be filed in an appropriate probate court. This is often required even when there is no reason to probate a will. Simply filing a will with a probate court doesn’t necessarily mean any further actions will be taken.
Wrapping Up Affairs
The executor will also be taking care of all of the details related to the decedent’s personal affairs. This means checking to see if Social Security benefits were stopped (usually funeral homes will do this), cancelling credit cards, closing bank accounts, and notifying appropriate government agencies or financial institutions of the death.
Setting Up an Estate Bank Account
If an estate is going to be managed and become a potential source of additional revenue, any money related to the estate typically needs to be kept separate from other assets. So, if you only have one bank account, you wouldn’t be able to add whatever money is left in the estate to your account. Instead, the general recommendation is to set up a bank account in the name of the estate to make it easier to handle debt obligations and specified distributions to individuals named in the will.
Maintaining Payments to Manage the Estate
Some estate’s are large enough to be used to continue to pay mortgage payments or make other recurring payments as specified. The executor will have ensure that everything is set up that any ongoing payments or expenses specific to the estate are appropriately handled.
Paying Off Final Income Taxes
Depending on when a death occurs, there may be tax obligations for the current tax year or for the year the decedent was alive. The executor will need to ensure that any final tax obligations are met. This may include contacting an accountant to prepare necessary tax documentation and arranging for tax payments to be taken out of the estate’s funds.
Ensuring Proper Distribution of Property
The executor will make sure property is divided as specified by the will. If there is property that is not mentioned in the will, it will be distributed as per applicable state laws.
As an executor, you will have many important responsibilities. An estate attorney can further clarify your duties and explain what you’ll need to do in greater detail. If you’re at a point where you are deciding on an executor for your own will, make sure you know what responsibilities you are passing on to whoever you may choose. Also, remember that the state will make distribution decisions based on an established order of succession if there is no will. An estate attorney can also offer advice specific to your situation.