an executor of an estate

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an executor of an estate

an executor of an estate Although state laws provide for the payment of executors, since so many executors are close family members, they often don’t ask to be compensated.

In addition to carrying out duties in a diligent, impartial and honest manner, an executor may also be required to perform any or all of the following activities, among others:

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1. Get a Copy of the Will and File It With the Local Probate Court

The executor is in charge of locating, reading and understanding the will—usually, even if probate isn’t necessary, the will still must be filed with the probate court. At this step, the executor also determines who inherits the property.

2. Notify Banks, Credit Card Companies, and Government Agencies of the Decedent’s Death

The Social Security Administration, along with the decedent’s bank and credit card companies, are just some examples of who should be notified of the death.

3. Decide What Kind of Probate Is Necessary

Because inheritance laws may facilitate the passing of certain properties without probate (such as property held jointly by a husband and wife), probate isn’t always necessary. Additionally, the value of the estate may allow it to pass through an expedited process. If probate is required, you need to file a petition with the court to be appointed an executor. You will likely need an attorney’s assistance to accomplish this.

4. Represent the Estate in Court

An executor may be required to appear in court on behalf of the estate.

5. Set up a Bank Account for Incoming Funds and Pay Any Ongoing Bills

If the decedent is owed money such as incoming paychecks, this account can hold them. An executor should be on the lookout for mortgages, utilities and similar bills that still need to be paid throughout the probate process.

6. File an Inventory of the Estate’s Assets With the Court

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In many states, the court requires the executor to submit a detailed inventory of the assets in the probate estate.

7. Maintain the Property Until It Can Be Distributed or Sold

This includes keeping up a house until it is distributed to heirs or sold- even deciding whether the property needs to be sold at all. Also, an executor must be sure to find all personal property in the estate and protect it until distribution. If the decedent had a safety deposit box, the executor should locate it and keep it safe.

8. Pay the Estate’s Debts and Taxes

State law dictates the procedure for notifying creditors, and the estate must also file income tax returns from the first of the current year until the date of the decedent’s death. If the estate is large enough, there may be state and/or federal estate taxes to pay as well

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9. Distribute Assets

Distribution occurs according to the wishes expressed in the will. If there is no will, state intestacy laws apply.

10. Dispose of Other Property

If there is any property left after paying off the estate’s debts and distribution to heirs, the executor is responsible for disposing of it.

Since estates vary greatly in size and complexity, and executor’s job may be easy or challenging to carry out- and responsibilities may very well go beyond the 10 basic items in this list. But while an executor can decline the position or resign at any point in the process, sometimes all that is needed is some legal advice. Consulting with an attorney is generally to make sure that the

The executor of an estate is someone who wraps up a deceased individual’s financial affairs. If the deceased has a will, the will usually names a close relative, friend, accountant, attorney or financial institution to act as executor of the will. If the deceased wanted more than one person to handle their affairs—such as more than one child—they might name co-executors.

The executor should have integrity and good judgment. The law requires them to act in the estate’s best interest (what’s called “fiduciary duty”) even if they are also an heir, which is often the case.

What Is an Executor or Executrix of Estate?

An executor of estate is the person responsible for carrying out the deceased’s wishes as laid out in their will, such as distributing assets to beneficiaries. The executor also handles other tasks associated with closing out the deceased’s affairs, including paying off creditors, issuing notices of death and filing final tax returns.

In some states, the executor may go by another name, such as “personal representative.” “Executrix” is an outdated term for a woman performing the role of executor.

How an Executor Gets Appointed

Often, the deceased’s will names an estate executor. But sometimes it doesn’t, and other times the deceased—also called the testator—has no will (in other words, dies intestate) or the will is invalid. In those cases, a probate court judge will name someone, usually a close relative, to serve in this role. This person will be called an administrator or personal representative instead of an executor, but the job is the same.

You don’t have to accept the role of administrator or executor of the estate. If you refuse, an alternate or contingent executor named in the will (or administrator appointed by the probate court judge) will handle the responsibilities. Even though it’s customary to be compensated for this role, it can be time-consuming and emotionally challenging.

Here are some situations where you might prefer to pass on the duties of an executor:

  1. You live far away from the deceased
  2. Heirs (or people who believe they should be heirs) seem likely to fight over the estate’s assets
  3. You are too grief-stricken to take on the job or in poor health
  4. You’ve been named co-executor of a will and you don’t get along with the other executor
  5. You’re not detail-oriented
  6. You’re too busy with other responsibilities, such as work or caregiving

It’s reasonable to refuse. It’s also possible that you’d rather handle the job because you trust yourself more than you trust others to do it. And if you begin the job but can’t finish it, you can hire professional help or pass on the responsibility to the next person in line.

A court can override the deceased’s choice of estate executor, and may do so if that person is not of legal age, has a criminal history, has a substance abuse problem,or a mental disability. The court may not choose a new executor simply because a beneficiary is unhappy with the choice.

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Duties of an Executor

An executor must always act in good faith, and that means one of an executor’s duties is to know when handling all the estate’s affairs is beyond their abilities. Sometimes an executor of estate may need to hire a professional such as an accountant or attorney to assist with valuing and distributing certain assets, such as:

  • Assets with disputed ownership
  • Business interests
  • Royalties
  • Out-of-state assets
  • Complex investments

Ambiguities in the will and substantial bequests to a minor can also call for a professional’s expertise. It is customary for the estate to pay for any professional help.

What an Executor Cannot Do

An executor cannot do things that are not in the estate’s best interest. For example, the executor cannot put their own interests above those of the estate. The executor also cannot override the will (at least, not without a court hearing to determine, for example, that the will is invalid). Nor can the executor refuse to pay legitimate creditors or withhold a beneficiary’s inheritance.

It probably goes without saying, but an executor cannot take money from the estate, and that includes distributing their own inheritance or paying themselvesf for the executor’s duties before the proper steps have been carried out, such as establishing the estate’s gross value and settling the estate’s debts and taxes.

The executor cannot sell the estate’s assets for less than market value, which means that getting assets independently appraised before selling them is often a good idea. For example, in selling off the estate’s assets, the executor cannot purchase the deceased’s residence for $100,000 when it is worth $300,000, a practice called self-dealing. If an executor sells property to themselves, it must be for fair market value. An executor also cannot co-mingle their own assets with the estate’s assets.

An executor also cannot fail to do anything on the executor’s to-do checklist, below, unless it doesn’t apply. Potential repercussions for violating fiduciary duty in executing an estate include being removed as executor, being sued, getting fined, and serving jail time. Mistakes made in good faith are less likely to have severe repercussions than ones made out of carelessness, negligence, or self-interest.

An Executor’s To-Do Checklist

Here’s what an executor should try to do within the first week of the death:

  • Secure the home
  • Arrange care for any pets
  • Notify the state department of health of the death if a funeral home, crematorium, hospital, or nursing facility has not
  • Get multiple certified copies of the death certificate from the funeral home, crematorium, or state vital records office
  • Notify current employer, if applicable

Here are some tasks an executor should try to do within the first one to three months:

  • File the will (if there is one) with the probate court in the deceased’s county of residence as well as a petition for probate (check your state’s filing deadlines)
  • Notify the deceased’s beneficiaries of the probate hearing
  • Get the court’s affirmation of your role as executor (or administrator) and receive the letters testamentary allowing you to carry out the will (or administer the estate)
  • Notify the Social Security Administration, Centers for Medicare & Medicaid Services, Department of Motor Vehicles, U.S. Postal Service, and other government agencies that provided payments or services to the deceased (others might include the Department of Veterans Affairs and state pension fund administrators)
  • Return any Social Security payment(s) received in the month of death or thereafter
  • Go through the deceased’s financial documents to create an inventory of the estate’s assets and liabilities, including handling digital assets (social media, online photo storage) unless someone else was designated as digital executor
  • Ensure that the estate receives any employment pay and benefits owed to the deceased, such as pay for unused vacation time
  • Collect any personal or business debts owed to the deceased, including rent of a commercial or residential real estate property
  • Notify the financial institutions, creditors, credit bureaus and lenders (student lender, auto lender, personal lender, etc.) where the deceased had accounts
  • Notify insurance providers, especially life insurance providers—but make sure to keep policies that protect the insured’s possessions (including their residence) in force until ownership is transferred
  • Transfer the estate’s liquid assets into an interest-bearing estate bank account that will be used to pay off the estate’s liabilities
  • Using the estate’s assets, continue paying the mortgage, homeowners insurance, property taxes, homeowners association fees, and utility bills until the property is sold or transferred to an heir (or, have heirs pay these costs and keep records so they can be reimbursed)
    Looking further down the road, here’s what an executor should try to do within three to six months of the death:

    an executor of an estate
    an executor of an estate

File the estate’s final income tax returns (or hire a tax professional to do it)

  1. If applicable, file state and federal estate tax returns
  2. If necessary, sell assets to pay the estate’s debts
  3. Pay creditors, but check with an attorney first if it seems the estate has more debts than assets to pay them.
  4. It’s important to proceed with caution if the estate is insolvent.Here’s what an executor should try to do within six to 12 months of the death:
  • Submit an accounting of all the estate’s transactions you’ve conducted to the probate court for approval
  • Issue payment from the estate for your services as executor
  • Distribute remaining assets to heirs
  • Schedule a final probate hearing to complete the process

 

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