Introduction
Are you wondering about the duties and obligations of the estate executor? Confused about whether you get paid for the job and what you might need to take care of?
An estate executor is responsible for handling a deceased person’s affairs for their probate estate after they pass on. Once someone has died, they can’t legally own property anymore. Everything that the deceased person owned when they died must transfer to living beneficiaries with the help of the executor.
What is Probate?
Probate involves distributing a deceased person’s estate through a legal process, paying off debts, and making sure assets are given to designated beneficiaries correctly. During the probate process, someone must administer the assets in the estate. If there’s a will that describes how to administer the estate, the named administrator will be called the executor of the will. If the decedent didn’t name an executor or there isn’t a will, the probate court will choose one.
Once an executor is known, the judge will grant that person authorization to use letters of administration to act on the estate’s behalf. As the executor, you should provide this information to financial institutions, insurance companies, or other businesses to confirm that you can legally act for estate.
Executor’s Duties
Probate can be a lengthy process (sometimes lasting for years), especially when applied to a complicated estate. An executor must manage the estate. It often involves managing the estate in dealing with the heirs and beneficiaries of the deceased person. Here are some of the executor’s duties (though others may apply in your situation):
Communicating About the Will
As an executor, you may have to speak with appraisers, accountants, and other professionals. You may also need to manage the estate through communicating with the probate court, court filings, and showing up in court.
Submitting the Will
One of the first things you must do as the executor is submit the deceased person’s testament and last will to the court. After this, you’ll attend a hearing to determine the validity of the will and ensure that it’s legally sound and error-free.
Collecting Assets
First, you’ll need to identify the deceased person’s assets, then keep track of them and gather them when you can. If the decedent leaves a valuable item, it’s important to secure this type of property so that a relative doesn’t claim it first. The process of gathering assets can involve going through personal account papers of the deceased person. You may also need to talk with their loved ones to find accounts and take control of them.
Maintaining Assets
Once you’ve collected and identified the assets, you must maintain them as needed with funds from the estate. Some examples of maintenance include ensuring that you keep loans current and that insurance policies stay in place when necessary. You may have to create a bank account for the estate, then transfer the decedent’s funds and assets into the new account to operate the estate.
Contacting People
The executor must tell beneficiaries about the death (either formally or informally), if they don’t already know about it. They will also need to contact and cancel any benefits, subscriptions, or services the deceased person had in place. This may include credit cards or government programs.
Handling Tax Matters
As the executor, you must get the assets in the estate valued for tax reasons to determine the estate tax amount (if applicable). You may need to make and file an income tax return for the estate if any assets within it earn income while the probate process is in progress. In addition, you must make and file a personal return covering the year before the estate owner died.
Finally, you must submit information that details the transactions and actions you made for the estate to the court. If the accounting is in sound order, the judge will grant you authority to give out the property and remaining funds in the estate to the named beneficiaries.
Dealing with Creditors as an Executor
Another potential obligation for an executor is contacting creditors and paying off the deceased person’s debts. The creditors need to know about the death since the estate will be responsible for covering the remaining debts and bills. Heirs, beneficiaries, and relatives usually aren’t liable unless they’ve cosigned on an account or loan. Spouses are only liable for community property debts and not each other’s personal debts.
You can usually identify a deceased person’s creditors using the same methods you employed to collect their assets. Notify them that the person has passed as soon as you can and file a notice with the local paper to inform people about the probate proceedings. Doing this as soon as you can is essential for avoiding hassle with the estate and creditors later on.
Does an Executor Get Paid?
Distributing an estate and fulfilling the related executor duties is no small task and you’ll typically be entitled to payment for this work. Included in the considerations that will determine how much you’re paid are the nature of the work involved, the compensation typically charged for similar work, and the size of the estate.
Your capabilities and experience, the difficulty of the estate, and time limitations will also determine the amount you receive. Some people will cover the matter of executor compensation in their will, but if these provisions don’t exist, Arizona law will take over. If you and the deceased person were closely related, you may decide to waive this payment to avoid extra taxes on your inheritance.
Need Some Help with Estate Planning in Arizona?
This was just a basic overview of the executor’s role in the estate planning process. Some estates will be much simpler and straightforward, while others will be much more complicated. Several factors will help determine how complex an estate plan is, including how much it’s worth, whether any of the assets earn income, and more.
If you have any further questions on this matter, speak with an estate planning attorney to get some answers. They can help you figure out what to expect and which steps to take next.
Call our Estate team at (480)467-4325 to discuss your case today.