Being an estate executor can be complicated and time consuming. But having a plan can help make these duties go smoothly.
An executor is the estate’s personal representative and is legally responsible for protecting the deceased person’s home, savings and other assets until the probate process is completed and its assets are disbursed. The executor’s primary estate administration duty is assuring that assets are disbursed according to the deceased’s will or trust.
The executor makes funeral and burial arrangements and pays these expenses from the estate. Funeral homes provide copies of the death certificate.
Copies must be submitted to banks, investment firms, life insurers, the Department of Veteran Affairs, and the Social Security Administration. The certificate is also needed for filing the person’s final tax return.
It is important to notify the SSA to stop payments or the estate will have to pay back benefits.
Will or trust
The will is needed for probate court and must be filed within a few days or up to a month after death.
Living trust assets may be disbursed immediately without court approval. A probate judge, however, must rule on the distribution of assets governed by a will. Probate can last from six months to two years.
If an estate undergoes probate, the judge will legally confirm the executor’s appointment with letters testamentary. These documents prove that the executor can act on the estate’s behalf to pay bills, file tax returns, manage and distribute assets, deal with beneficiaries and open and close bank accounts.
Ideally, the deceased person prepared a detailed list of assets and their location. These include wills and trusts and documents for insurance, investment accounts, pre-arranged funeral plans, bank accounts, vacation homes, artwork, business interests and partnerships.
Hopefully, these documents are kept in a safety deposit box. Attorneys who prepared the will, however, have an asset list.
Bills and taxes
The executor pays the debts and taxes owed by the deceased person and may open an account to pay these debts. Heirs are not liable for any debts exceeding assets.
If the deceased person did not have a detailed accounting of monthly expenses and income, the executor must review checkbooks, bank statements, mail and email and tax returns for this information.
The executor must assure that the estate can cover all debts. If not, the judge will prioritize creditors.
Executors should be deliberative and knowledgeable because they may be personally liable if they miss crucial steps. Set up a separate filing system and keep copies of everything sent and received from creditors, beneficiaries, and financial institutions.
Accountants and appraisers may provide expertise. Attorneys can help executors fulfill their duties.