Strongly consider hiring an attorney to help you through this process. It will save the estate money in the long run.
Be methodical and detail-oriented. Keeping detailed records will help defuse any disputes.
Always act in the best interest of the beneficiaries while following the will in good faith.
Maintain transparency and open communication with the family, particularly when it comes to the sale of assets or any decisions that impact their inheritance.
Follow the strictest letter of the rules, rather than choosing expedience or self interest.
Being chosen to be an executor in someone’s will is quite an honor. At the same time, it is a great responsibility to follow the wishes laid out in the will and make the best choices for the beneficiaries. Performing all the administrative duties often takes a lot of time, and managing everyone’s feelings and expectations can be stressful, especially if you are part of the family or named in the will yourself.
The primary role of an executor (also sometimes called a personal representative) is to act on behalf of the beneficiaries, and to preserve all of the assets of the estate, with a duty to maintain good faith and trust in settling the affairs of the person who died. Ideally, the executor is named in the will. If there is no will, the court appoints an administrator rather than an executor, and the estate is distributed according to state law.
Virtually every state requires an executor to be mentally competent and at least 18 years old. Some states also require the executor to be a resident of the same state as the person who died, among other requirements. It’s common for a will’s executor to also be one of its beneficiaries.
Executors are paid a fee for their service, typically around 2% to 4% of the estate’s value; the amount varies by size of the estate, the complexity of the tasks involved, and state law. Executors generally get paid once the estate is settled. If they incur certain out-of-pocket expenses, they can often reimburse themselves during the course of the estate administration. If the executor is also a beneficiary, they receive their inheritance distribution at the same time as the other beneficiaries
The role of executor can be demanding, even when dealing with the most orderly estates. Executors who fail to meet their responsibilities can be held personally liable for the financial consequences (e.g., not filing tax returns or allowing insurance policies to lapse). It can also feel quite personal if beneficiaries believe their inheritance was reduced because of your executorship or suspect you of increasing your own share of the estate unfairly. They might even take legal action against what they believe to be improper conduct.
As the estate’s fiduciary, i.e. the person authorized to act on behalf of the estate, you need to be methodical and detail-oriented. Being able to point to accurate records will help you defuse any financial disputes or emotional responses to your decisions. Before beginning, it will be extremely helpful to read the will thoroughly, to study applicable state laws, and to have a way to access the will quickly.
Executors who fail to meet their responsibilities can be held personally liable for the financial consequences.
The first administrative task is to obtain copies of the death certificate from the funeral home or the county. Ask for multiple copies, as many organizations require originals, especially insurance companies and government agencies. The person’s credit card company, bank, and mortgage company also need to be notified. You might need professional assistance to access accounts or to file the necessary paperwork; like all experts hired to assist in the settling of the estate, these services can generally be paid for from the estate’s assets.
Within a time period of a few days to a few months, depending on state law, the executor must file a copy of the will and the death certificate in probate court. Even if the estate is small enough that assets can pass to beneficiaries without full probate, most states require you to file the will in probate court.
If the estate must go through probate, the executor also files a petition with the clerk's office, which then issues a legal document (called letters testamentary) that names the executor as fiduciary of the estate.
Once the executor is named fiduciary and has the death certificate, they set up a bank account (called an estate account) to manage the estate’s incoming money (e.g., paychecks, dividends, tax refunds), one-time expenses (e.g., funeral, income tax, credit card), and ongoing payments (e.g., mortgage, utilities, insurance).
If the will or necessity calls for any real estate holdings to be sold, the executor maintains the property and manages expenses until the sale is complete. The executor may also have to locate and close out any life insurance policies or financial assets, even if these are payable-on-death accounts that do not go through probate.
In some states, the executor is required to keep an inventory of all probate assets, as family members and/or beneficiaries are not entitled to any belongings until the estate is settled. It may also be necessary to get a formal appraisal of some or all assets to determine what creditors may be able to claim and how to divide the estate properly among beneficiaries according to the will.
In general, the executor cannot do anything to breach their fiduciary duties to the estate or otherwise act in their own interests over the interests of the beneficiaries, even if that decision seems expeditious or more efficient.
Common breaches include signing the dead person’s name to an unsigned will, performing executor duties before obtaining letters testamentary, making changes to the will, or withholding inheritance.
In addition, any property sales need to be conducted with due diligence in appraising the property and selling at a competitive market price. Any hint of “self-dealing” to your own benefit could get you in legal trouble.
Finally, it is important to communicate with the beneficiaries—you cannot conduct business of the estate without keeping them informed on a regular basis. If not, the beneficiaries may have cause to request that you be replaced as executor.
Since they are held to a fiduciary standard, prudence must be taken in everything an executor does. Ignorance of the laws does not excuse a breach of your executor duties in the eyes of the court, and an accidental error can be taken just as seriously as an intentional violation. Consult an estate attorney to make sure you do not do anything that unwittingly breaches your fiduciary duties.
If a will names two or more people as co-executors (e.g., siblings), this can add a layer of complexity to settling the estate, because each has complete (not partial) authority. Co-executors must act together in agreement on all matters rather than signing off individually. In addition, co-executors may be required to perform certain duties together, such as submitting the will or signing checks on behalf of the estate—which is made all the more difficult if the executors don't live near one another. With large estates, it can be helpful for each co-executor to manage specific asset classes and the other executors to defer to their decisions in that area.
Co-executors must act together in agreement on all matters, rather than signing off individually.
Before any assets can be distributed to the beneficiaries of the estate, all of its debts must be settled. In most states, the executor is required to make a public notice to creditors that the person has died, and leave open a specific window of time to allow any unknown creditors to come forward.
It is at this point that some assets may need to be sold in order to cover the estate’s debts, sometimes up to or including the family home. It is very important to be fully transparent, leave lines of communication open, and discuss any decisions about what needs to happen with the family, so that nobody feels that you were acting anything other than in their best interest.
If the estate has more debts than assets, it will be considered an insolvent estate, and all of its assets will have to go toward settling the debts. State law and probate court will dictate which debts take priority over others. If the wrong creditors are paid, the executor can be held personally liable when a priority creditor comes to get paid and finds that there is no money left in the estate. This is why it is very important to do everything exactly the right way and keep meticulous records.
The executor is also responsible for filing and paying all taxes on the estate, including the person's final income tax return, taxes on any money the estate itself makes, and for very large estates, federal or state estate taxes.
After all debts and taxes are paid from the estate, the executor distributes the remaining assets, transferring funds and signing over titles and deeds. Many questions from beneficiaries can arise at this point, especially if they were not actively involved in the person’s life and/or the estate settlement.
Then all that is left is to close the estate by submitting a petition to the court along with a full accounting of everything received by or paid out from the estate. When the court approves your accounting, you will be officially released from your duties as executor.
The decision to serve as an executor is a personal one. Even if you are named for this role in the will, it is your choice whether to accept it. It depends on whether you believe you have the time, skills, and temperament to perform the necessary duties. The best way to assess whether you want to take this on is to read the will and decide whether you find its terms an interesting challenge or a daunting ordeal. Whatever you decide, know that you are doing what you need to do to honor both your own grief and the wishes of your loved one, as they would not have wanted you to take this on if you are not up for it ●
Probate is often a long and complex process, but it is also completely manageable if you stay organized and follow the instructions of the court. It’s definitely still a good idea to avoid the full probate process, if you can. We’ll walk you through whichever scenario applies to your loved one’s estate.