If you’ve been asked to serve as the executor of a will, you’ve probably already realized that it’s both an honor and a heavy responsibility. On one hand, the fact that a friend or family member named you as executor indicates that the deceased placed great trust in you and faith in your judgment. On the other, it’s a tedious job, with a number of legal hoops an executor must jump through.
Still, armed with a little knowledge, faithfully carrying out your duties as executor is a wonderful way to honor your loved one’s memory. Before you assume the role of executor and begin carrying out your duties, however, here are two important questions you should ask yourself:
1. Do you want the job? Serving as executor is a big job. If you believe that you’re unable do the job for any reason, you can file a document to inform the court that you respectfully decline. If your loved one made a will, he or she probably named an alternate executor; if there is no will, or if the will does not name an alternate, the court will appoint one.
2. Do you need to hire an attorney? It depends on the complexity of the estate. If you are the spouse of the deceased and the main beneficiary, you may be able to settle matters without going to the expense of hiring an attorney. You’ll have to complete and file a lot of paperwork, but the probate court clerk can assist you, and you can also enlist the help of a trusted friend.
If the estate is more complicated, if anyone is contesting the will, or if the guardianship of young children will be decided, it’s probably best to hire an attorney. In addition to making sure everything is done according to the law, an estate attorney can perform most of the functions of the executor. All you will have to do is sign off on court documents and pay the attorney with estate funds.
Avoiding Common Errors
When you’ve accepted the role of executor and are ready to carry out your duties, take a few minutes to review these common errors. Being alert to these pitfalls can save a lot of time, money, and headaches down the road. Here are the steps you should take to avoid costly errors:
- Don’t pay any estate expenses from your own funds. Unless you are the spouse of the deceased, you are not responsible for payment of the deceased’s personal bills. Payments on those bills should be made from estate funds only. Furthermore, estate taxes are assessed on the estate’s value after any debts have been paid. If the deceased’s debts are not paid from estate funds, the net value of the estate will be artificially inflated; the estate will be assessed a higher tax bill, and your share of the inheritance will be less. Instead, open a separate checking account in the name of the estate to cover estate expenses, including legal fees, funeral expenses and taxes.
- Do perform a thorough search for estate assets. The executor must create an exhaustive list of estate property: cash, real estate, automobiles and other vehicles, stocks, bonds, insurance policies. If any assets are discovered after the estate has been settled, probate must be reopened – and no one wants that! Having the deceased’s mail forwarded to your address can help you discover previously unknown assets when you receive statements for the deceased’s accounts.
- Do file tax returns. As of this writing (2010), the federal estate tax has been repealed, but it is scheduled to retrigger in 2011, with an exemption of $1 million and a tax rate of 50%. State estate tax laws vary from state to state; check with the probate court clerk or your attorney to learn about the laws in your state. Even if the estate is exempt from estate taxes, however, filing a final federal income tax return on behalf of the deceased is one of your duties as executor, and if the estate earns more than $600 during probate (e.g., stock dividends, interest, etc.), you must file an income return for the estate.
The probate court clerk will provide you with a complete list of your duties as an executor, including:
- Obtain multiple copies of the death certificate, which you’ll need when you notify employers, pension plan, life insurance company, etc. of the deceased’s death.
- Locate and organize important papers, beginning with the will and including items like stock certificates, trust documents, and life insurance policies.
- Complete the paperwork to open probate in probate court.
- Notify beneficiaries named in the will, and notify the deceased’s post office, utilities, banks, and creditors of the death.
- Complete an inventory of personal belongings. Have items of value appraised.
- Ask the deceased’s employer about unpaid salary, insurance, and other benefits the estate may be entitled to.
- Apply for the Social Security “death benefit,” along with veterans, fraternal, or other benefits the estate may be entitled to.
Share Your Thoughts
Do you have any other tips from your experience as estate executor? Please share them in a comment to help others.