Responsibilities and Potential Pitfalls: What Does an Executor Do?
A friend or a relative just passed away, and you find out that she named you as the executor for her estate. My guess is that you react with a mixed set of emotions. You’re grieving over the loss, feeling honored by the trust placed in you and nervous about taking on the assignment. Questions come up: What exactly does an executor do? How much time will you need to devote to the task? Are you even knowledgable enough to confidently take on the role? Do you have to say yes?
Let’s start with a definition. An executor ensures that a deceased person’s property is distributed in accordance with his or her last will. As the “chief administrator” of someone’s estate you have what the law calls a fiduciary duty. You must act honestly, diligently and in the best interest of the beneficiaries. You are expected to treat the assets in the trust as though they were your own.
As for the specific tasks you’ll face, here’s a brief overview:
- Identify the decedent’s assets and manage them until you have distributed them.
- Locate and contact the people named as beneficiaries and determine whether and where the will must go through probate.
- Prepare and file the necessary estate tax returns.
- Notify potential creditors of your relative’s death and pay off any outstanding debt and tax burdens before you distribute the assets.
- Ensure that recurring payments to lenders or insurance companies continue to be made.
- Keep your own funds separate from the estate’s (no commingling.)
- Distribute the assets as laid out in the will.
The entire process of administering and distributing an estate takes at least a few months. Some executors go through it without professional assistance, but be advised that errors can cost you dearly. If you miss steps, don’t pay taxes or file certain documents on time, or if you make the wrong investment choices you open yourself up to litigation.
You can avoid these potential pitfalls by consulting an experienced attorney early in the process. He can help you deal with conflicting interests among the decedent’s beneficiaries, advise you on difficult decisions and take the lead in the probate proceedings if necessary. He will also ensure that a full record of your actions and decisions is kept. The attorney’s fees will be paid out of the decedent’s estate.
Finally — do you have to say yes if your relative or friend named you as the executor of his will? No, you don’t. If you’re unable or unwilling to serve, the person designated as your alternate will be asked to take on the duty. If the decedent didn’t provide for an alternate the court will appoint an executor.
By Kevin J. Moore