- Posted by Michael Kane, CFP
- On February 24, 2017
- estate planning, executor, responsibilities
Being chosen as the executor of an estate is both an honor and an enormous responsibility.
The job of the executor is to protect the personal property of the deceased person until all debts and taxes have been paid and to transfer the remaining assets to the estate’s beneficiaries. The duties may vary depending on the complexity of the estate, but here are ten primary responsibilities an executor should remember and uphold:
RESPONSIBILITIES OF AN EXECUTOR
- Determine who inherits the property. If the deceased person left a will, the executor will read it to determine how property is to be distributed.
- Decide whether or not probate court proceedings are needed. Typically, many types of assets and accounts can avoid a lengthy or expensive probate process with advanced planning. However, certain assets owned solely by the deceased may be subject to probate.
- Decide whether certain items can be transferred immediately, even if probate is required for other property. There are a variety of rules based on different types of property and assets. The executor will determine whether an immediate transfer is legally permissible for each of these types of property.
- If the executor determines that probate is required, he or she, along with an attorney, will file the will and all required legal documents with the local probate court.
- Handle day-to-day details of the estate. Responsibilities in this area include everything from terminating leases and credit cards to notifying financial institutions and government agencies of the decedent’s death.
- Establish a bank account for the estate. This account will hold money that is owed to the deceased person, such as paychecks or stock dividends. It will also be used to pay ongoing expenses like mortgage payments, utility bills, and homeowner’s insurance premiums on behalf of the deceased.
- File an inventory of the estate’s assets with the court. Many states require a detailed inventory of the deceased person’s assets be submitted to the probate court. It’s important to research and understand your state’s specific requirements for the submission of this information.
- Maintain property until it can be distributed or sold.
- Pay the estate’s debts and taxes. The executor must notify creditors and file final income tax returns from the first of the current year until the date of the decedent’s death. Estate taxes must be paid no later than nine months after the decedent’s death.
- Close the estate and distribute any remaining assets to beneficiaries. The executor is responsible for making sure all claims against the estate are paid before distributing the remaining assets to beneficiaries.
CONSULT WITH A PROFESSIONAL
Federal estate taxes or taxes due after death can be very complicated and very costly. It’s advisable to consult with an attorney or CPA who is familiar with both federal estate tax laws and state inheritance taxes to fulfill all responsibilities to both the estate and its beneficiaries.
For more information on the duties of an executor or for answers to any other estate planning questions, you may have, request a call with RAA.