Being chosen as the executor of an estate can be both an honor and a major obligation depending on the complexity of the estate and a number of issues that may arise along the way. For this reason, a potential executor should make sure he or she knows what is involved before accepting this responsibility.

An executor is legally responsible for sorting out the finances of the person who died, generally making sure debts and taxes are paid and distributing out whatever is left to the beneficiaries named in the will.

In addition to carrying out the executor duties in a diligent, impartial and honest manner, an executor is typically responsible for handling a series of tasks during the estate settlement process.

The following is a list of 10 primary duties and responsibilities of an executor.

1. Determine if probate is necessary.

Probate is the court-supervised process of settling a deceased person's final affairs.

It is the responsibility of the executor to determine whether probate is necessary. This often depends on the size of the estate, after all the non-probated assets (anything that can be transferred outside of probate) are removed.

Probate isn't necessary for the transfer of many common assets. For example, probate isn’t necessary to:

transfer real estate and other assets owned in joint tenancy to the surviving joint tenant
transfer bank accounts and securities registered in "payable on death" form to beneficiaries
transfer funds in IRAs and retirement plans to named beneficiaries
transfer property left to the surviving spouse (in some states),
transfer assets held in trusts (such as living trusts or AB marital bypass trusts) to named beneficiaries.

Even if probate is required, many states have a streamlined procedure for small estates where the estate settlement process can be expedited.

2. Get a copy of the will, file it with the local probate court, and notify beneficiaries

The executor is in charge of locating, reading and understanding the will.

Usually, even if probate isn’t necessary, the will still must be filed with the local probate court.

The court will confirm the role of estate executor at this time. The executor should then send a notice of the probate proceeding to the beneficiaries named in the will and if necessary, to certain close relatives (in most cases, a surviving spouse and children) who would have been entitled to property even without a valid will.

3. Notify banks, credit card companies and government agencies of the decedent’s death

Social Security Administration, Medicare and the local post office, along with the decedent’s bank and credit card companies are just a few of the examples of entities that the executor should notify regarding the death.

4. Locate and manage assets.

The executor locates and secures the deceased person's assets and sensibly manage them during the probate process, which commonly takes about a year. Depending on the contents of the will and the financial condition of the estate, this may involve deciding whether to sell real estate or securities owned by the deceased person. If the decedent had a safety deposit box, the executor should locate it and keep the contents safe. This also applies to crypto assets that the decedent may have owned in a digital wallet.

5. Set up an estate bank account for incoming funds and pay any ongoing bills

If the decedent is owed money such as from incoming paychecks, the estate account will be able to hold them. The executor is responsible for finding and collecting bills related to mortgages, utilities and other bills that still need to be paid throughout the probate process. Certain contracts and leases may need to be terminated by the executor as well.

6. File an inventory of the estate’s assets with the court

In many states, the court requires the executor to submit a detailed inventory of the estate’s assets.

7. Pay debts and notify creditors.

The executor pays any debts that the estate is legally required to pay.

The executor also notifies creditors of the probate proceeding; the required method of notice will be set out by state law. The creditors then have a certain amount of time -- usually four to six months -- to file a claim for payment of any bills or other obligations the executor hasn't voluntarily paid. The executor then decides whether or not a claim is valid.

8. Pay the estate’s income and estate taxes

It is the responsibility of the executor to file a final income tax return from the first of the current year until the date of the decedent’s death. If the estate is large enough, there may be state and/or federal estate taxes to pay, as well as state and federal estate tax returns to file.

9. Distribute property

The executor supervises the distribution of property -- such as cash, personal belongings, and real estate -- to the people or organizations named in the will. If there is no will, state intestacy laws apply.

10. Close the estate.

When debts and taxes have been paid and all the property has been distributed to the beneficiaries, the executor should ask the probate court to formally close the estate.

Because estates will vary greatly in size and complexity, an executor's job can be fairly easy or extremely challenging based on the situation. Often times, the executor’s responsibilities will go well beyond the 10 listed in the bullet points above.

And while an executor can decline the position or resign at any point during this process, often times all that is needed is some legal advice. At the very least, consulting with an estate planning attorney will ensure that the executor is properly complying with his or her duties.

Sources:

Thought Leadership

“Achieving Clarity in a Complex World”

Executor of an Estate – Top 10 list of Responsibilities

Thought Leadership