What Is an Executor?
The executor is the individual who carries out the deceased’s wishes according to their will. Here’s how they work and what they do.
One of the most difficult and critical choices in estate planning is who you appoint as your executor. This is the person who’ll take on the massive responsibility of managing and settling your estate after you pass.
In this article, we’ll break down the crucial duties an executor must perform, as well as the challenges they’ll face. You’ll also learn how to select the right one, so you can minimize mishandling of your estate.
Understanding the Role of an Executor
An executor is the individual you select to manage and, eventually, settle your estate. You’ll name them in your will, which is a document that also bequeaths assets and appoints guardians for people in your custody, such as minor children. As such, this person must distribute assets to your named beneficiaries, as well as act in a fiduciary capacity.
Typically, an executor carries out one’s estate exactly as their will instructs. In simple terms, their job is to both pay off the deceased person’s debts, as well as distribute assets to any recipients that the document mentions.
Executors are crucial because, without one, a person’s exact wishes may never come to fruition. In this case, the deceased’s assets are subject to probate, which requires a state court to appoint an administrator, who will then distribute them.
Duties of an Executor
After people pass away, a flurry of legal and financial matters must be dealt with. This includes tasks like distributing assets, paying debts, or making court appearances. The majority of this falls on the executor to manage. Here’s a full look at the duties somebody in this position may need to take care of:
Notify Organizations of the Person’s Death
When a person dies, the executor must alert certain organizations (financial, governmental, etc.) to avoid a range of issues, such as collecting unneeded debt or charges. This includes entities like:
- Social Security Administration
- Department of Motor Vehicles
- United States Postal Service
- Credit bureaus (Experian, Equifax, TransUnion)
While an executor is carrying this out, they’ll typically need to provide a death certificate as proof. If one doesn’t notify the above agencies, a litany of financial issues could occur, complicating the estate settling process.
Establish an Estate Bank Account
As you’ll see later in this section, paying debts and distributing assets is an important aspect of the probate process. To simplify the process, an executor should open an estate bank account to use for any transactions related to it.
Acquire a Death Certificate
Having a deceased person’s death certificate is crucial for an executor to effectively manage one’s estate. They’re essential to notify companies of one’s passing, as well as file insurance claims. Typically, a funeral home can provide copies.
File a Copy of the Will with Probate Court
It’s key to file a copy of the will with the county probate court. This allows the court to officially name someone as an executor. Even if the state has a simplified process, you may be required to file.
Representing the Estate in Court
The executor may need to represent the estate in court to further the probate process. This includes attending a hearing as everything begins. Later on, one may need to make other appearances if someone contests the will.
When people pass away, there’s often a variety of debt or payments that one must handle. For instance, there may be credit card debt or mortgages that need settling. Or there may be insurance premiums to pay. It’s the job of the person managing the estate to use its assets to settle any debts.
Maintain an Inventory of the Assets
It’s important to take stock of all the assets a person left behind. Once the executor has a complete list, they’ll typically need to file it with the probate court to create transparency. Items you’ll need to take inventory of include:
- Stocks and bonds
- Real estate
- Valuables, such as jewelry, art, or electronics (these may need a professional appraisal to determine their value).
- Retirement accounts (IRA, 401(k), etc.)
- Life insurance policies
Distribute Assets to Beneficiaries
After the deceased’s debts are settled, the executor now needs to distribute assets to beneficiaries or heirs according to the instructions in the will. These can be individuals or organizations, such as charities or businesses.
Challenges They Face
Being an executor isn’t easy. There are plenty of obstacles they may face as they work to settle one’s estate. The main one is how time-consuming the process can be. According to a study by EstateExec, somebody in the role can expend about 570 hours of effort to settle a deceased person’s assets.
Another challenge is dealing with difficult beneficiaries. If there are heirs who decide to dispute the estate, it can add undue stress on the executor. An attorney is a useful tool to help deal with high tensions during the estate settling process.
Executors must also operate under the probate process. The time it takes for it to settle can depend on several factors, including:
- The size of the estate.
- The county/state it’s taking place in.
- Difficulties with beneficiaries (contesting the estate, locating them, etc.).
Finally, it can be difficult to manage an estate if you don’t know how the process works. It involves several legal and financial tasks that can be overwhelming for the average person. If you’re an executor and find yourself in this situation, you should consider working with both a financial advisor and an attorney.
How to Select the Right Executor
Selecting an executor is crucial as you build an estate plan. But how do you know who to choose? There are a few key characteristics you should evaluate in a candidate to know if they’re the right choice:
- Trustworthiness. It’s important to select someone honest, responsible, and ethical.
- Mental capacity. Settling an estate brings about a great deal of mental stress. It also tests one’s intelligence, as they must navigate legal and financial duties. You should choose someone who can handle all of that at one time.
- Age. Appointees should be a mature adult and up to the task. However, you’ll also want to choose a person who is less likely to die before you, as you’ll want your selection to still be around to take care of everything.
- Location. Be sure to consider where your candidate lives. If they’re far away from you and the beneficiaries, it may be harder for them to fulfill their duties.
- Neutrality. The person you select can be controversial among family and friends. If you can, try to choose someone who causes as little drama as possible and is accepted by many.
How a Professional Can Help
Whether you’re an executor or are in the process of selecting one for your estate, it may be wise to seek help from a professional. Hiring an estate planner and attorney can help you navigate each task and be more informed so that you don’t make avoidable mistakes. The former can help you figure out how to distribute assets in a way that’s most efficient and lessens the financial burden. The latter is able to work with you to prevent and manage disputes, as well as draft important documents, such as a will or power of attorney.
To find an estate planner near you, consider using a free matching tool. After filling out a short quiz, it’ll present you with up to three vetted advisors in your area. Then, it’ll be up to you to meet with each one and decide which works best for you.
Frequently Asked Questions
How long does the executor have to pay the beneficiaries?
The answer to this depends on a couple different factors. First (and probably most importantly), the size of the estate. Those with fewer assets may only take around six months, whereas larger ones can take up to a year or more to execute.
Another factor is how efficient the probate process is, as well as whether beneficiaries are being difficult or not. If roadblocks are preventing the executor from doing their job, it can take longer for the bequest of assets to occur.
Can an executor decide who gets what?
No, they don’t get a say in what assets go to which people or organizations. Their job is to bequeath assets based on the testator’s wishes, as well as pay debts that the estate owes.
There is, however, an exception to this rule. If the testator’s wishes are unclear in the will, then it may be up to the executor to decide who gets what. For example, if their wishes say that the house must be sold and the proceeds must be given to charity, it may be up to the person running the estate to choose which organization to donate to.
Can an executor of a will be a beneficiary?
Yes, and it often happens. A prime example of this is if a person is left everything and is also named an executor. In this case, the person is responsible for bequeathing assets to themselves, as well as paying all debts that the testator had.
Can my attorney be the executor of my will?
Yes, and in some cases, it may be a smart choice. An attorney may be someone you trust and know has the mental capacity to carry out the task. A financial advisor may also be a good pick if you have confidence in them.
Do executors get paid?
Yes, however, the amounts may vary depending on the state and the estate size. For example, California gives executors four percent on the first $100,000, two percent for the next $800,000, one percent on the next $9M, and a half of a percent for the next $15M. Also, if they have any out-of-pocket expenses, they should be reimbursed for that.
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