Executor of a Will – Examining Responsibilities
When you draft a will, you must name an executor, someone whom you entrust to execute your will. So what exactly does and an executor of a will do??
Choosing an Executor
You need to choose an individual whom you trust. This individual does not need to be someone in your family, someone you love, or someone who is skilled in legal or financial matters.
Your executor simply needs to be someone whom you can entrust to protect your estate upon your death and who you know will transfer in a timely fashion your property and assets to the entitled individuals (inheritors).
In short, an executor must be someone who is honest, willing, able and capable of undertaking this important task.The executor of a will must fulfill a “fiduciary duty,” which means the executor must act in good faith on behalf of the deceased.
Understanding the Executor’s Responsibilities
You can make choosing an executor of your will easier by first understanding the executor’s responsibilities. And no two wills are ever alike. Every will varies widely on its complexity, circumstances, debts of the deceased, and the assets that must be divided and dispersed. You can generally expect the executor of a will to undertake the following responsibilities:
The executor of a will must locate the deceased person’s assets and manage them until they are distributed to the beneficiaries listed in the will. A home is good example of an asset listed in a will. The executor is responsible for selling the property so the will’s inheritors can split the proceeds.
The executor of a will is responsible for the probate process. In general, a will must go through the probate process, which is essentially a court proceeding. Whether a will must go through probate and the probate process itself will vary from state to state. Therefore, an executor will either disperse the deceased’s assets without probate or proceed through a streamlined probate process. However, larger estates are usually not exempt from probate.
The executor is responsible to file the will in the local probate office, regardless of whether the estate is subject to the probate process. This step is almost always required by law. It is important for you to know the probate process can be a costly and time-consuming procedure. It, therefore, pays to be educated on the probate process.
Your executor may avoid the probate process altogether upon your death if you make other financial arrangements beforehand. For example, you can draft a living trust. Talk with your financial advisor about the advantages and disadvantages of both a living trust and a will.
The executor of a will must read the will and contact the inheritors listed in the will.
The executor of a will is responsible for the incidentals of the deceased person’s estate. These can include any number of financial tasks, including contacting the Social Security Administration, canceling credit cards, canceling utilities, notifying the post office, notifying Medicare, Medicaid or the Department of Veterans Affairs, and notifying banks.
The executor of a will is often responsible to set up an estate bank account to keep finances fluid. This allows the executor to pay bills and deposit money associated with the deceased. For example, the estate bank account may be used to deposit paychecks and stock dividends, pay utility bills, and make mortgage payments.
The executor of a will is responsible to make sure that all taxes owed by the deceased are paid. The executor must file the deceased’s income tax returns and pay all appropriate state and local taxes up to the date of death. State and federal tax returns are often required for large estates only.
Finally, the executor of the will is ultimately responsible to distribute money and assets to the individuals listed in the will. All property and money must be distributed in accordance to state law to those beneficiaries named in the will or who are entitled to property or money.
Indeed, a will’s executor has responsibilities. By choosing the right individual, you can be confident that your assets will go to the right hands.