The Duties of an Estate Executor
An estate executor plays a variety of roles, and is often required to act on sensitive issues. Many executors begin with tasks outside the formal job requirements, such as helping to plan the funeral and reimbursing or advancing funds to family members who pay for it. If the deceased is to be interred, the deed to a burial plot must be located or a plot must be purchased. As an executor, it is also your duty to help ensure the safety of the decedent's home and property during and after the funeral. Your "formal" job as executor then begins and will include the following areas of responsibility:
- Ascertaining what the deceased owned, and collecting any money due on the decedent's estate.
- Paying outstanding bills and claims against the estate.
- Managing assets wisely until they can be distributed according to the will.
- Handling insurance, trusts, and any other situations that are not specifically covered in the will.
- Distributing property according to the wishes of the deceased, as expressed in the will.
- Paying all estate and inheritance taxes.
- Assuring all affairs of the estate are formally settled to the satisfaction of the probate court.
What About Probate?
During probate, you cannot exercise your official legal rights as executor until the court establishes that the deceased left a valid will, and subsequently issues "letters testamentary" that formally name you as the executor. The probate process can be lengthy, time-consuming, and expensive, but is usually fairly simple. As designated executor, you must file a petition for probate in the appropriate court, submitting the death certificate and the original will.
An executor has to work closely with family and attorneys. An attorney's staff can generally handle routine tasks adequately. An inexperienced executor can obtain help from a personal legal professional and/or the legal counsel for the estate.
The decedent's property is the first order of business. This includes not only the obvious, such as real estate, cars, and bank accounts, but also pensions, retirement accounts, insurance benefits from employers, and old insurance policies that never lapsed. The deceased may have had accounts in many banks or safe deposit boxes in other states. A little "detective work" may be necessary to locate certain banking or legal documents in obscure places.
Notification is then given to all creditors, anyone named in the will and, if there is no will, anyone who would inherit something. The purpose is to give potential beneficiaries a chance to protest if they feel the will is invalid. In most states, a surviving spouse is allowed to challenge a will if he or she was left less than a certain percentage of the estate. If there are no protestations, the probate court will issue "letters."
After the "letters" have been obtained, you can begin to administer the estate. You can transfer the decedent's bank accounts into estate accounts, while other assets may be transferred from the decedent's name to your name. You need copies of the death certificate and your "certificate of letters" to prove that you have, in fact, been named executor.
Another proceeding, called a "will construction proceeding," may be required. This occurs when all parties agree that a will is valid, but there is an argument as to its meaning.
Often, some of the decedent's assets are not covered by the will. Joint property, for example, passes to the other joint owner, thus avoiding the probate process. However, the executor must still keep accurate records, because joint property can affect estate tax bills. In fact, it is unwise to transfer property of any kind until all debts are paid. Otherwise, you may be held responsible if the estate is not large enough to pay all of the creditors.
The "Value" of an Appraisal
You may be required to hire appraisers to judge the value of any art collection, real estate property, or small business interest. You may also want to appraise miscellaneous property, such as furniture or household goods. This will help in the decision to give the property to the heirs directly, or sell it and divide the proceeds among the heirs. It is wise to consult first with the heirs regarding which type of distribution they would prefer.
The decedent's insurance company will usually pay insurance benefits promptly upon your completion and submission of the company's claim form with another copy of the death certificate and the original policy. If death resulted from an accident, check the policy; the estate may receive two or three times the face value of the life insurance policy under "double indemnity" provisions.
You Are Responsible...
As executor, until final settlement of the estate, you are responsible for keeping the estate in good order, protecting tangible assets, and safely managing the estate's funds. Letting funds sit idle without earning interest may be detrimental to the value of the estate. You are responsible for managing the estate's assets prudently. If you do not do so, you may be liable to the beneficiaries, who could require you to make up losses of the estate from your own funds. As you can see, knowing—beforehand—what is required of you, will help you successfully complete your tasks as an executor.