Understanding the Role of the Executor
The executor of a will is typically entrusted with the estate of a person who has died and distributing that person’s assets to their beneficiaries.
What Is the Role of the Executor of Will?
An executor is a person who is appointed by a will to carry out the instructions written in it. The role of an executor can be complex, depending on the terms of the will and what needs to be done after someone dies.
When someone dies, estate assets must be settled. This involves settling any debts, paying estate tax, and handling the division of personal property and financial assets.
Estates may be either testate or intestate. A testate estate occurs when someone dies with a valid will, while an intestate estate occurs when there is no valid will. If someone dies without leaving a will (known as dying intestate), the estate will go through probate process.
If you are named as an executor in your friend’s or family member’s will, you will need to determine whether there are any estate’s assets. These assets may include real estate, stocks and bonds, bank accounts, cars, retirement accounts, or other personal property items.
Once you know what assets are part of the estate, you’ll need to decide how they should be disposed of according to the decedent’s wishes expressed in their last will and testament.
An asset protection attorney from Wood Law Group can help you go through this process seamlessly.
What Is the Role of an Executor in Estate Planning?
Soon after someone passes away is the busiest time for the executor of the estate, handling the distribution of the deceased person’s assets. However, executor duties may continue after the estate is settled.
For example, they must file an estate tax return within nine months of the date of death. If assets are left over after all estate’s debts and income tax returns have been paid, they must be distributed according to the terms of the will. This process is also called estate administration.
A good executor will take on these tasks with care and diligence — but it’s important to remember that an executor doesn’t have absolute control over the money and property. An executor’s job is not just to carry out your wishes but also to protect the interests of the estate’s beneficiaries.
Duties of an Executor
An executor has many responsibilities when it comes to settling an estate. Some common tasks include:
- Notifying creditors and beneficiaries about their rights under the will;
- Collecting assets from financial institutions;
- Paying off debts and taxes;
- Managing assets;
- Transferring ownership of assets according to instructions provided by the deceased person in their will;
- Distributing assets as directed by the terms of the will
What Are the Responsibilities of an Executor?
After a person dies, their estate must go through probate. Probate is the legal process of authenticating a will and appointing an executor. This process will include a probate attorney. It is the executor’s responsibility to follow the instructions in the will.
Filing the Will
An executor files the decedent’s will with the probate court in the county where they lived. You can usually find the appropriate probate court online or contact your state’s judiciary office.
If the deceased left behind a valid will, you’d need to file it along with a petition to open probate. The petition requests that the court appoint you as executor. In some states, this document is called a “petition for probate of will and appointment of executor” or similar.
You may also be responsible for filing any codicils (amendments) to the will with the court. A codicil can be used to make changes to an existing will without having to rewrite the entire document. This can be smoothly done with a qualified estate planning attorney.
Opening an Estate Bank Account
An executor is responsible for opening a bank account in the estate’s name known as estate checking account. This account is used to pay any debts and taxes owed by the estate and ongoing expenses.
Obtaining the Death Certificate
The first thing you’ll need to obtain as an executor is a copy of the death certificate. The funeral home often takes care of this for you.
You’ll need several certified copies of the death certificate to open the estate bank account and transfer assets to beneficiaries. You may also need to provide a copy to the deceased person’s employer, life insurance company, and retirement plan administrator.
Notifying the Government, Friends, Family, and Others
As executor, you’ll need to handle a lot of paperwork. One of your first tasks will be to notify various government agencies about the death. This includes the Social Security Administration (SSA) and the Internal Revenue Service (IRS).
You’ll also need to notify the deceased person’s creditors, as well as their friends and family members. In some cases, you may be required to place a notice in a local newspaper about the death and the probate proceedings.
Paying Debts and Taxes
After you’ve notified the relevant government agencies, you’ll need to pay the deceased person’s debts and taxes. This includes outstanding credit card bills, personal loans, and medical expenses. You’ll also need to pay any taxes owed to the state or federal government.
As executor, you’ll use the estate bank account money to pay these debts and taxes. Sometimes, you can use the decedent’s life insurance policy to pay off debts and taxes.
Appearing in Court
In most probate cases, the executor won’t have to appear in court. However, there are some situations where you may be required to appear as a personal representative. For example, if someone challenges the will or if there are problems with the estate.
Once the court approves the final report, you’ll be able to close the estate and your role as executor as per the state law.
The executor has a lot of responsibility and must be up for the task. If you are considering becoming an executor, ensure you understand the role and are prepared for the challenges.
When you are appointed an executor, you will be entitled to compensation, which will be taxable income. The amount you receive varies from one to five per cent of the deceased’s estate.
Setting fair compensation for an executor and explaining it in your will can help avoid conflicts among your beneficiaries and may reduce the tax burden on the executor.
As you can see, the executor is an important part of estate planning. If you have questions or want to discuss your estate plan with a professional, reach out to an estate planning and trust lawyer Las Vegas at Wood Law Group for a free consultation. We would be happy to help!