What are the duties of the executor of an estate?
An executor is the individual nominated by a deceased person to handle the gathering and distribution of estate assets. Being an estate executor is a demanding responsibility. Executors handle funds, property, and accounts.
The first job any executor will undertake is collecting and securing all property of the deceased person. This includes personal property such as clothes, jewelry, any other items in the house, as well as any real property. The executor should change the locks on the doors of any real property to ensure that none of the property can be removed. Additionally, the executor must insure valuable items and perhaps even place smaller valuable items in a lockbox.
Hire an Attorney
Most estates will pass through probate, a public court proceeding where a judge reviews and approves assets for release. Since this proceeding can be tricky and time consuming, it is important to hire a licensed attorney who specializes in probate and wills to handle the court appearance and paperwork that comes with probate. Attorneys will also provide the executor with notarized death certificates that must be shown as proof of death for account access. Additionally, an attorney can help an executer make tough decisions such as which assets to sell to pay expenses.
Publishing Death Information
Most states require that there be a public posting within the state giving notice of the probate hearing. This is so that creditors or banks are made aware of the death in order to come forward with any valuable information or bills that must be paid. Again, an attorney can guide the executor through this process if necessary and may even have a form with example publications.
In most cases, not every account in the deceased's name will be documented in their estate plan. Checking, savings, retirement, pension, and life insurance accounts are just a few examples of accounts that could exist under their name and must be located. In order to gain access to and either close or allocate these accounts, the executor must typically show a copy of the notarized death certificate and possibly a note from the probate judge listing that person as executor.
Business & Tax Documents
If the deceased was a partner in a business or held a large amount of shares, these businesses must be contacted so that agreements can be addressed. These documents can be time sensitive, triggering clauses that could affect the person’s share in the business. An executor will be required to collect these documents and give them to an attorney for review. Additionally, all income documents from the previous year must be located and the final income taxes filed for the deceased. If there are any taxes owed, they must be paid from the estate.
The next debt in line for payment includes funeral expenses. An executor will need to contact the funeral home and obtain an invoice for the amount owed for the funeral. Sometimes this debt may require the sale of assets, which typically must be approved by a judge. If this is the case, the executor should contact the attorney and have the proper forms filed; the court typically responds in a timely manner. If if it unclear which assets to sell, an attorney can advise the best order for liquidating assets.
Now that the government and funeral home have been paid, it’s time to attend to the rest of the creditors. These can include hospitals, care facilities, credit cards, mortgage companies, and many others. An executor will need to through the deceased's files and locate all invoices. If it's unclear whether a certain bill was paid, the next step is to contact the business and find out. It is best to keep a running list of bills to be paid with the appropriate invoices paperclipped and give this to the lawyer. If the total is very large, the court may need to approve the payments.
Once all the debts are paid and just prior to distributing the remaining inheritances, the attorney and the court must be paid. Some states may require that the family has the option of either paying these fees themselves or further liquidating assets from the estate. In this case, an executor will meet with the family and determine their desired course of action.
Once all accounts are located and expenses paid, any remaining estate assets can be distributed. An executor must obtain a signed receipt for each distribution from the person who inherited so that there is no doubt as to whether the asset was properly distributed; and present these receipts to the attorney, who will submit them to the judge to close out the probate proceeding.