If you’ve been chosen to be the executor of a decedent’s estate, you may be feeling overwhelmed with the various responsibilities that come along with it. Along the same lines, if you are in the process of choosing an executor for your estate, you may be wondering what your estate’s executor will need to do and how you can make the process easier for them.
While an executor’s specific duties often depend on the estate’s complexity, knowing the executor’s primary responsibilities offers a helpful roadmap to get started. Although it is not required that an executor be exceptionally knowledgeable in the intricacies of law and finance, the position requires the person to act as a fiduciary, which means they must always act in the decedent’s best interests.
An experienced financial advisor can coach you through the process of serving as an executor or setting up your estate plan to make your executor’s job easier.
Getting Started as an Executor
When you take on the responsibility of acting as an estate’s executor, the first order of business is to get your bearings and gain a clear picture of the wishes you need to help carry out. Start by locating the decedent’s estate. Take a thorough inventory of the estate’s assets and then take steps to safeguard those assets right away.
As you go through this process, it’s important to know that it is not uncommon to encounter situations where people want to take assets when they are not supposed to. Some family members may think they are entitled to items and seek to claim them without permission. Whether dealing with items with financial value or sentimental value, emotions are often running high, so it is the executor’s duty to follow the proper process and always act in the decedent’s best interests.
As soon as possible, the executor also needs to set up a bank account for the estate. You will need to create a bank account solely for the estate, not only to keep the decedent’s finances separate from their own, but to continue necessary payments, such as mortgage, insurances, and taxes. When it comes to financial obligations, the clock does not stop when a person dies, so the executor needs to stay on top of their bills.
Ensuring the protection of the decedent’s assets throughout this process is a fiduciary responsibility and allows for their wishes to be fulfilled.
What an Executor Needs to Know About the Probate Process
For anyone who finds themselves in the position of being the executor of an estate, it is important to understand the probate process and how it applies to the decedent’s situation.
First, the executor needs to determine if probate is even necessary. Beneficiary designations and titling of property avoid the probate process because they are passed by beneficiary or contract law. Some assets, such as an IRA with a beneficiary listed or a house titled joint tenancy with rights of survivorship, may not be subject to probate. For assets that don’t have these designations and instead pass through the will, probate will be necessary.
If probate is necessary, the executor must obtain a copy of the will and file it with the local probate court. When filing with the probate court, they will grant the executor what’s called “letters testamentary.” This will officially give a person the power to be the estate’s executor and carry out the decedent’s wishes.
Depending on the specific situation, an estate may need to go through the probate process, which is typically lengthy and costly. The executor must represent the decedent’s estate during probate, including appearing in court on the estate’s behalf if necessary.
Notifications Executors Needs to Make
An important responsibility in carrying out the executor’s duties includes making key notifications to the appropriate parties.
In the will, the decedent may have named individuals or charitable organizations to receive specific property. It is the executor’s responsibility to ensure that the right heirs receive the right assets, so these parties should be notified of what they are supposed to receive as soon as possible.
It is also the executor’s responsibility to notify banks, credit card companies, and government agencies, such as the Social Security Administration, of the decedent’s death. Notifying these entities is a major step so that credit cards can be canceled or accounts closed as needed to begin wrapping up the decedent’s financial affairs.
Wrapping Up the Decedent’s Affairs
As mentioned, an estate’s executor has a number of critical responsibilities in a process that often takes a great deal of time and effort, and that includes the final steps required to wrap up the decedent’s affairs.
An estate’s executor must keep diligent and accurate records of everything they do throughout the entire process. This makes the final steps of wrapping up the decedent’s affairs go more smoothly.
The executor’s ultimate responsibility is to ensure the decedent’s property listed in the will is distributed and recorded appropriately. Any property that is not named in the will should be passed on according to state laws. Typically, before anyone named in a will can receive their inheritance, the decedent’s creditors and debts must be paid off first. When coming to the end of this process, the executor is responsible for paying off the estate’s creditors and final debts.
Finally, the executor will also have to ensure that a tax return is filed for the decedent’s final income tax year as well as the estate.
The Bottom Line
While the executor’s duties are often dependent on the estate’s complexity, it’s easy to see how taking on these responsibilities can become overwhelming for many.
From safeguarding assets to assessing and carrying out the probate to making the appropriate notifications, distributing property, and wrapping up the decedent’s final affairs, the process can be long and tedious, especially if you are not well prepared.
At Aspen, we want to help you put the proper documents in place to ensure your estate’s executor has what they need to handle the process with minimal confusion or frustration. And if you find yourself as the executor of an estate, we can help coach you through the process. You don’t need to do this alone.
This information is not intended to substitute for specific individualized advice, and we suggest you discuss your specific situation with a qualified legal advisor.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
