Maybe a loved one asked you years ago if you would serve as the executor of their estate, and they just recently died. Perhaps the close family member, like a parent, just passed away, and the probate courts want you to step up and serve as the executor because your parents did not name one.
Regardless of how you find yourself fulfilling the responsibilities of an executor, it’s important that you understand your actual duties. Otherwise, you might make a mistake that not only affects the inheritance that people receive but also your own financial situation.
What duties must you fulfill as an executor?
Secure the estate and the assets within it
One of your first responsibilities will be to make sure that the assets that comprise the testator’s estate are secure and safe. You may need to change the locks on a home no longer occupied by anyone or pick up and physically secure property like jewelry. Some burglars will specifically target the homes of the recently deceased, and there is always the risk of a family member trying to pocket valuables.
Provide the probate courts with the will
The testator will likely have left behind estate planning documents. You will need to file the appropriate paperwork with the probate courts if you did not already do so when you assumed your role as executor. Initiating probate proceedings is the first step toward the eventual distribution of assets.
Notify creditors, and close accounts
Going through the deceased individual’s correspondence and financial records should help you locate most of their creditors and identify what active or revolving accounts they have open. You will need to close and settle existing accounts.
You will also need to request final bills from creditors. Giving creditors adequate notice is important because they have the legal right to make a claim against the estate for any debts as of yet unpaid.
File taxes
There are numerous potential tax responsibilities that go with estate administration. You will most likely need to file a final tax return for the deceased taxpayer. You may also need to arrange the appointment of estate taxes if the estate is particularly large. If you have to sell assets, you may need to file a tax return on behalf of the estate itself.
Distribute property according to instructions
Only after you have settled accounts, repaid debts and paid all applicable taxes can you potentially begin to distribute property to the beneficiaries of the estate. It is crucial that you meet all other financial obligations before handing out assets to family members and friends. Otherwise you, as the executor, may be financially responsible for unpaid debts.
Learning about the responsibilities that come with estate administration can help you fulfill them without taking on any unnecessary personal risk.