When a person passes away, their final wishes don’t carry themselves out. Someone must take the lead to manage their affairs, pay off their debts, and ensure their property goes to the right people. This person is called an executor.
Being named an executor is a significant honor, but it is also a demanding job that requires organization, patience, and legal responsibility. Here is a breakdown of what an executor actually does.
1. Locating the Will and Filing for Probate
The first task of an executor is to find the original copy of the deceased person’s (the “decedent’s”) will. Once found, the executor must file it with the local probate court.
- Probate: This is the legal process of proving that a will is valid.
- Letters Testamentary: The court will issue a document (often called Letters Testamentary) that officially gives the executor the legal authority to act on behalf of the estate.
2. Managing and Protecting Assets
Before anything can be given away, the executor must figure out exactly what the decedent owned. This involves:
- Inventory: Making a list of all assets, including real estate, bank accounts, investment portfolios, jewelry, and vehicles.
- Protection: Ensuring that property is safe. This might mean changing the locks on a house, maintaining insurance policies, or moving a vehicle to a secure location.
- Appraisal: Getting professional valuations for high-value items like art or real estate to determine their “fair market value” at the time of death.
3. Notifying Interested Parties
An executor acts as the primary communicator. They must notify:
- Beneficiaries: The people named in the will who are set to inherit property.
- Creditors: Any companies or people to whom the decedent owed money.
- Government Agencies: This includes the Social Security Administration, the IRS, and the local DMV.
4. Paying Debts and Taxes
An estate cannot be distributed to heirs until its obligations are met. The executor uses the estate’s funds (not their own money) to pay:
- Funeral Expenses: Usually the first thing paid.
- Valid Creditors: Credit card bills, mortgages, and utility payments.
- Final Income Taxes: Filing the decedent’s last tax return.
- Estate Taxes: If the estate is large enough, the executor must file state and federal estate tax returns.
5. Distributing the Remaining Estate
Once all debts, taxes, and administrative fees (including the executor’s own fee) are paid, the executor distributes the remaining assets according to the instructions in the will.
- If the will says “give the house to my daughter,” the executor handles the deed transfer.
- If the will says “split my savings equally among my three children,” the executor writes the checks.
6. Closing the Estate
The final step is to provide a detailed accounting to the probate court, showing every dollar that came in and every dollar that went out. Once the court approves this accounting and the distributions are complete, the executor asks the court to formally close the estate and release them from their duties.
Important Considerations for Executors
- Fiduciary Duty: An executor has a “fiduciary duty,” which is the highest legal standard of care. They must act in the best interest of the estate and its beneficiaries, not themselves.
- Personal Liability: If an executor manages the estate poorly—for example, by paying beneficiaries before paying the IRS—they can be held personally liable for the loss.
- Professional Help: Most executors hire a probate attorney or a CPA to help with the legal and tax complexities. These professional fees are paid for by the estate, not the executor.
Summary
In short, an executor is part project manager, part accountant, and part legal representative. While the process can take anywhere from six months to two years, a diligent executor ensures that a loved one’s legacy is handled with dignity and according to their final wishes.