What Does an Executor Do?
The responsibilities of an Executor can vary by state and by the particular estate at issue, but some common tasks include:
- Communication with the court or attorney and accountants
- Management of:
- Accrued salary
- Personal property
- Life insurance or retirement proceeds payable to the estate
- Business interests held by the Decedent
- Distributions to beneficiaries and heirs
- Bank accounts
- Paying taxes, bills and other expenses from estate assets
- Maintaining detailed accounts and records and, if required, filing an inventory of assets and accounting of assets with the court
Executor of Estate Duties & Responsibilities
An executor of a will manages and administers the testator’s estate. The exact responsibilities of an executor will vary by state and depend on the specific details of the estate at hand, but Executors often handle the following:
- Gathering assets of the estate
- Coordinating the estate’s payment of taxes and debts
- Making distributions to heirs and Beneficiaries
- Potentially making filings with a probate or other court that handles probate proceedings
- Working with accountants and attorneys to handle some of the tasks required in probate, if the circumstances allow
What an Executor Cannot Do
An executor must act in the estate’s best interest at all times. Therefore, an executor should never put their own interests above those of the estate. It probably goes without saying, but an executor cannot take money from the estate, and that includes distributing their own inheritance or paying themselves for the executor’s duties before the proper steps have been carried out, such as establishing the estate’s gross value and settling the estate’s debts and taxes. For example, an executor cannot sell the estate’s assets for less than market value. So, that means the executor cannot purchase the deceased’s residence for $200,000 when it is worth $400,000; this is called self-dealing. Thus, if an executor sells property to themselves, it must be for fair market value which is why getting assets independently appraised before selling them is often important and a good idea.
Choosing an Executor
Generally, the minimum requirements for someone to be an executor is to be at least 18 years of age and not a felon. In some states, there could also be restrictions on a person who lives out-of-state serving as an executor. And an executor does not have to have a legal or financial background, given wills are usually straightforward and an executor can always consult with an estate planning attorney in Orange County. Outside of these considerations, someone that you feel will have your best interest at hand is always a good choice.
When Does the Executor Role Begin?
Your duties and responsibilities as an Executor won’t come into play until after the death of the Testator. In most cases, a court must approve your appointment before you assume any responsibilities.
If you’ve recently been named Executor, you likely don’t need to do anything immediately, unless the Testator has passed away. If he or she is still living, and they’ve let you know they are naming you Executor, it may be helpful to have a conversation with them.
While it can be difficult to raise the subject, remember the fact that you were nominated means you’re someone who’s held in very high regard. You’re being trusted to handle the many responsibilities that come with being named Executor. Having that conversation might make it easier to confidently carry out your duties when the time comes.
Does a Court Need to Approve an Executor?
Yes, the court must approve the nomination to appoint an Executor.
Does a Court Always Approve an Executor?
Often, a court will approve an appointed Executor. However, if there is someone who objects to the appointment, the objection may be taken into consideration.
What Is a Gift Left in a Will Called?
A gift left in a will is known as a bequest or a legacy.
Is an Executor the Same as a Trustee?
Though similar, they differ in that an executor carries out one’s will, often under the supervision of a probate court; while a trustee is responsible for one’s trust. In some cases, the two may be the same individual, although they don’t have to be.
What Is Another Word for Executor?
The word “Executor” is the more common term used, but “Administrator” or “Personal Representative” are also used. Most often though, these are used in cases when an estate is intestate (when a Decedent dies without leaving a Will).
Can an Executor Also Be a Beneficiary?
As long as you’re acting in the best interest of the estate and as dictated by the Will, an Executor can also be a Beneficiary. It is actually common and it makes sense, as executors are better able to perform their duties when they are familiar with the decedent’s situation.
Do Executors Get Paid?
Executors are usually entitled to compensation for their work. If you’ve been named Executor, there may be provisions for compensation in the Will. When there is no Will, the amount can vary and depend on the state where the decedent passed away.
Need Help Fulfilling Your Role as an Executor? Contact Evolution Tax and Legal
If a loved one has died and named you as an executor of their will, or if you want to create an estate plan and name an executor, you may want to speak to a lawyer about the work this entails. Evolution Tax and Legal specializes in this area of law and will be happy to help. Schedule a free consultation today!