Unless you are an attorney or a financial planning expert, dealing with an estate is probably something you will only do once or twice in your life. When a loved one dies, you may be named the executor of the estate in the will that individual leaves behind. If you are the beneficiary of an estate, you may need to deal with the named executor to get the assets you have coming. Either way, it pays to have an expert in your corner, someone who understands the duties of the executor and can explain exactly what this important individual will be doing.
First and foremost, it is important to understand exactly what an executor is. Once you know the definition of an executor, you will be better able to understand your duties and your rights.
What is an Executor?
The executor of the estate is the individual entrusted with ensuring that the final wishes of the deceased are granted. These final wishes may include the disposition of assets and possessions, as well as the sale of the family home and the distribution of the proceeds.
Being named the executor in a will is an honor, but it can also be an intimidating experience. As an executor, you have a great deal of responsibility, and serving in this position can be both time-consuming and emotionally draining.
The more you know about the job of the executor and how it works, the easier it will be to perform your duties. As the executor of the will, you will be responsible for ensuring that any debts and obligations are paid and that all creditors are satisfied. You will also be responsible for distributing the remaining assets to the heirs named in the decedent’s will.
By law, the executor of the estate does not have to be an attorney or a financial expert, but having some legal and/or financial expertise will make the job a lot easier. If you have been named the executor of a will and do not feel comfortable with your level of expertise, you can always reach out to an experienced estate attorney for help and guidance.
A Fiduciary Duty
As an executor, you have a fiduciary duty, meaning that you are required to act in good faith when dealing with the will and the final wishes of the decedent. This is an important responsibility, both financially and legally, and it is important that you understand your rights and responsibilities in this regard.
When you act as an executor, you will not be entitled to any proceeds from the sale of property held in the estate. Depending on where you live, you may be entitled to a fee as compensation for your time. Most states mandate that the fee paid to the executor be reasonable, and that fee is typically based on the size and complexity of the will in question.
What Are the Duties of the Executor?
As the executor of the will, it is important that you understand your duties – and how they are to be executed. The exact duties with which you will be charged depend on the size of the estate and the complexity of the will, but those responsibilities will typically include:
- Locating the assets owned by the decedent
- Keeping the decedent’s assets safe until they can be distributed to the named heirs
- Paying creditors
- Determining whether or not it is necessary to probate the will – This decision will generally depend on the laws of the state and the nature of the will and the estate.
- Locating and contacting everyone named in the will – The executor is charged with making sure all property named in the will is distributed to the proper individuals.
- Ensuring the will is filed with the appropriate probate court – This duty is typically required by law, even in cases where the will does not need to be probated.
- Wrapping up the affairs of the decedent – This step may include everything from notifying the banks where the decedent maintained accounts to canceling their credit cards.
- Establishing a bank account for the estate – The executor will be required to set up a special bank account for the estate, a place where assets can be held and an account from which creditors can be paid.
- Continuing any necessary payments – It is important that ongoing bills be paid, including mortgage payments, insurance and so on.
- Paying off the debts and creditors of the estate – Before anyone can receive their inheritance, the creditors and debts must be paid off. The executor is required to notify creditors of the decedent’s death and make arrangements to get them paid.
- Payment of final income taxes due – The old saying that nothing is certain but death and taxes is true, and executors have to deal with both. Before the estate can be closed, the final income tax return will need to be filed, and any necessary payments to the IRS will have to be made.
- Ensuring that the property is distributed in accordance with the wishes of the decedent – Any property given through the will must be distributed as recorded. Any property not specifically named in the will must pass to the heirs in accordance with the laws of the state.
If the decedent died without a will, the individual in charge is known as the administrator instead of the executor. In cases where there is no will, the administrator will be in charge of researching state law and determining how the property will pass to the heirs. This is known as an intestate succession.
Having a will in place is the best way to ensure that your final wishes are carried out and that your assets are distributed properly. If you do not yet have a will, it is important to create one as soon as possible, and an experienced estate attorney can help you out.
If you have been named the executor of an estate, contacting an experienced attorney can help you protect your rights and do your job properly. Acting as an executor can be an intimidating experience, but having expert help in your corner will make it a lot easier.
For long-term peace of mind, contact us to set up a consultation today. We look forward to helping with your will and other estate planning needs.
Call our Arizona Estate Planning team at (480)467-4325 to discuss your case today.