The executor of a will is responsible for ensuring that the deceased’s intentions are followed out as well as administering the estate’s final affairs. The executor is authorized to function in this capacity by the local probate court. This does not necessarily imply that the executor has the last say on all estate decisions.
Who Is an Executor?
An executor is a person chosen by the court and typically named in a will who is legally responsible for taking care of a deceased person’s remaining financial responsibilities. This includes everything from selling property to paying bills and taxes. The majority of executors are close family members, with spouses, children, and parents being the most common.
What Does an Executor of a Will Do?
An executor of a will is legally responsible for sorting out the deceased’s finances, often ensuring that debts and taxes are paid and what remains is handed to the heirs.
An executor may be required to do any or all of the following acts, in addition to performing out duties diligently, impartially, and honestly:
#1. Make a copy of the will and submit it to the local probate court.
The executor is responsible for locating, reading, and comprehending the will—even if probate isn’t required, the will must still be filed with the probate court. At this point, the executor decides who will inherit the property.
#2. Inform banks, credit card companies, and government agencies of the death of the decedent.
The Social Security Administration, as well as the decedent’s bank and credit card companies, are just a few of the organizations that should be informed of the death.
#3. Determine What Type of Probate Is Required
Because inheritance laws may allow certain properties to pass without probate (such as property held jointly by a husband and wife), probate isn’t always required. Furthermore, the estate’s worth may allow it to go through an expedited process. If probate is required, you must petition the court to be named executor. You will almost certainly need the services of an attorney to accomplish this.
#4. Act as the Estate’s legal representative in court.
An executor may be summoned to court on behalf of the estate.
#5. Establish a bank account for incoming funds and pay any outstanding bills.
This account can hold money owed to the decedent, such as incoming salary. Throughout the probate procedure, an executor should be on the lookout for mortgages, utilities, and other payments that need to be paid.
#6. Submit to the Court an Inventory of the Estate’s Assets.
In many states, the executor is required to present a complete inventory of the assets in the probate estate to the court.
#7. Keep the property until it is ready to be distributed or sold.
This entails maintaining a home until it is passed to heirs or sold, as well as choosing whether the property should be sold at all. In addition, an executor must ensure that all personal property in the estate is located and protected until distribution. If the decedent had a safety deposit box, the executor should find it and secure it.
#8. Pay all estate debts and taxes.
The method for notifying creditors is governed by state law, and the estate must also file income tax returns from the beginning of the current year to the date of the decedent’s death. If the estate is substantial enough, state and/or federal estate taxes may be due.
#9. Asset Distribution
Distribution is carried out in accordance with the wishes specified in the will. In the absence of a will, state intestacy statutes apply.
#10. Other Property Disposal
The executor is responsible for disposing of any property that remains after paying off the estate’s debts and distributing it to heirs.
Because states vary widely in size and complexity, the executor’s task may be simple or difficult to carry out, and responsibilities may extend beyond the ten essential items on this list.
How to Appoint an Executor of Your Will
The executor you name in your will should be trustworthy and reliable. Here are some important aspects to consider while determining who to hire:
- Willingness: Being an executor is a big responsibility, and not everyone is up for it. Before naming your executor, discuss the idea and prospective tasks with them.
- Where they live: It’s a good idea to choose someone who lives nearby. This makes managing your inheritance, appearing in court, and distributing your property to your heirs easier for them.
- Family Choice: Consider choosing someone you and your family can rely on to carry out your wishes with minimal bias, outside influence, or family pressure.
- Their age: Your executor should be someone who will be living when you die.
- Their organizing abilities and attention to detail: Because an executor has a variety of difficult responsibilities, you may want to select someone who is naturally skilled at keeping things in order.
Who can be an Executor of a Will?
To be named as an executor of a will, you do not need any additional expertise or knowledge. However, in most cases, an executor must be at least 18 years old and must reside in the state where the will is filed in probate court. The executor must then be approved by the probate court before they can commence their duties.
Above all, your will’s executor should be someone you trust to carry out your ultimate instructions. Many people name one of their beneficiaries or heirs as executors, such as a spouse, kid, or close family member. Others choose to delegate the duty to a reputable attorney or accountant.
Should I Appoint My Spouse as an Executor of My Will?
It all depends. If you and your spouse have comparable expectations for your estate, they could be a good fit. However, if you die, your spouse may not want to think about the labor required to carry out your wishes right away. They will surely be in mourning, which can add to their already stressful situation. Before naming your spouse as executor of your will, you should have an open talk to ensure you’re both on the same page.
What Should I Do to Prepare My Executor?
- Talk to your possible executors right away: It’s critical to inform them of their responsibilities so that they can agree and be ready when the time comes. You can tell your executors directly through the site if you utilize FreeWill to make your will.
- Inform your executor of where you intend to preserve your will and testament: This is very crucial because they will require your will in order to begin the probate process and carry out your desires.
- Inform your executor of the whereabouts of any crucial property: This includes family heirlooms, automobiles, intellectual property, and other items. If they don’t have to look for this property, it will be easier for them to pass it to your heirs.
Can I Give My Executor Gifts?
In general, yeah! Giving presents to your executor is usually not restricted. Because the job needs some work, it’s a considerate gesture to compensate executors for their time and effort. They, like any other beneficiary or heir, can be named in your will.
Can My Executor Be Signatory To My Will?
It all depends. In most places, your will must be witnessed and signed by two persons in order to be legally legitimate. And these individuals cannot be designated as beneficiaries in order for the courts to regard your will as legal. So, if you wish to leave a gift to your executor, you can’t ask them to be a witness.
The precise witnessing requirements vary per state. If you have any queries about executors or witnesses, you should consult with a local estate attorney.
What if I do not have an executor?
If you do not name an executor or if your nominees are unable to serve, a judge will do it for you. Typically, the court will solicit volunteers and select one of them. This could be a relative or a beneficiary. If no one is found suitable to serve, a creditor may be appointed instead.
Is an Executor Required to Serve or Can They Refuse the responsibility?
The person named as executor in a will has the option to renounce the responsibility that comes with being an executor. Furthermore, anyone who initially accepted the post of an executor may resign at any moment. As a result, it is generally recommended that you identify alternate executors; otherwise, if your first candidate withdraws for whatever reason, a court will appoint a substitute executor.
Are Executors Paid?
Most executors execute their tasks without compensation, however, executors are eligible for compensation. Most executors do not seek remuneration because they are close family members who undertake their duty out of respect for the deceased. The amount paid to an executor is determined by state law and what a probate court determines to be appropriate under the circumstances.
Read Also: HOW TO FIND UNCLAIMED MONEY: Complete Guide
What You Should Know If You’re an Executor of a Will
While being chosen as an executor is an honor, carrying out a will requires more effort than you may expect. Understand some of the risks involved before agreeing to function as an executor. And understand how you might mitigate some of these potential hazards so that your role as executor runs properly.
#1. Conflicts with Co-executors
When a parent has more than one adult child, all children are often listed as co-executors to avoid bias. This approach, however, may not work well for people who are named. Some children may be out-of-state or even out of the nation, making it impossible to handle hands-on actions such as asset acquisition and property sale. Some people lack the financial resources to deal with creditors, comprehend inheritance tax issues, and do accounting to ensure that everything is in order. Having numerous executors also increases the quantity of paperwork significantly. Forms that must be signed by all executors, for example, must be distributed to everyone (in some cases, scanned documents that have been signed are acceptable, but in others only originals are acceptable).
#2. Conflicts with Heirs
The executor’s responsibility is to secure the estate’s assets and then distribute them in accordance with the deceased person’s desires. In certain families, heirs will arrive at a decedent’s home before the funeral, cherry-picking heirlooms and other treasures. In addition, the will may provide an executor discretion in determining distributions to heirs (e.g., distributing property or selling property and distributing cash). An executor may cause family strife just by doing their job.
#3. Time Waste
One of the most significant disadvantages of being an executor is the significant amount of time required to adequately execute tasks. Consider the time spent contacting various government agencies (e.g., the Social Security Administration to suspend Social Security benefits and, in the case of a surviving spouse, claim the $255 death benefit; the IRS and state tax authorities for income tax and death tax matters; and state unclaimed property departments to recoup utility deposits and other outstanding amounts that belonged to the decedent).
#4. Exposure to Personal Liability
As an executor, you must pay any outstanding taxes before distributing inheritances to heirs. You are personally liable for taxes if you pay heirs first and do not have enough funds in the estate’s checking account to pay them.
While many states are no longer concerned about federal income taxes due to the large exemption limit ($11.58 million in 2021), several states still levy death taxes on smaller estates. For death tax reasons, the estate’s worth exceeds the probate estate (the assets that do not pass immediately to named beneficiaries); it includes all assets in which the decedent had an interest (e.g., IRAs, annuities, life insurance owned by the decedent).
#5. Out-of-pocket expenses
An executor is permitted to be compensated for their efforts. The size of the estate usually determines the amount of compensation (e.g., a percentage of assets). In many circumstances, especially in smaller estates, an executor is asked to waive any payment.
Is it necessary for executors to hire a lawyer?
Many wills are pretty ordinary and straightforward, necessitating no particular understanding. Even if a will is probated, the paperwork required does not necessitate a legal degree. However, if there are disagreements, complex property concerns, considerable tax liability, and so on, an executor should carefully consider hiring a lawyer. An executor may consult with a lawyer to ask legal questions, or the executor may delegate the entire probate procedure to the lawyer.
What is the distinction between an executor and a power of attorney?
When your estate is in probate, an executor manages it (aka the process of being distributed and carried out). They specifically initiate and complete the probate process. They also manage your assets, pay your debts, and distribute property to your heirs in accordance with the terms of your will.
The legal authority to act on your behalf is referred to as power of attorney. This person is commonly referred to as your “agent” or “attorney-in-fact.” Powers of attorney can be wide or specific, covering healthcare, general finances, and other issues.
The two key distinctions between these words are the role’s obligations and when it takes effect. Powers of attorney are awarded during your lifetime and normally have no effect after your death. They take effect, for example, if you are unable to make judgments on your own (usually due to a decline in health). Your executor, on the other hand, begins their work only after you have died, and their sole responsibility is to administer and distribute your inheritance.
Conclusion
The executor of a will has a significant responsibility. Collecting assets, paying debts, and distributing inheritances while properly documenting the process with the courts can require a significant amount of time and work. To effectively accomplish the duty, the executor requires official authorization to spend estate funds and oversee matters. In the event of insolvency, the executor can even decide whether and how bequests should be changed.
That authority, however, is not without limitations. He or she must always behave in the estate’s best interests. As with any profession, mechanisms are in place to hold executors accountable and guarantee that no executor abuses their authority. When appointing your own executor, it is critical that you select someone you know to be both extremely skilled and trustworthy.
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