The executor of a will plays a very important role in the process of closing a deceased individual’s estate. Although many think of executors as simply the people who inform heirs of what they’ve inherited, the job is actually quite wide-ranging.
An executor is in charge of all the necessary tasks that come with carrying out a will and managing an estate. The executor must handle all the debts, loose ends, bequests and more that come with an estate. Every estate is different, so a complete list of duties is hard to come by. However, there are several steps of the process that will come up just about every time.
Paying Debts and Taxes
Among the most important duties of an executor is paying off all debts associated with the deceased’s estate. This includes personal loans, credit card debt, mortgages and any other outstanding liabilities. The executor will use the assets of the decedent to pay these debts.
Part of this process will involve locating all the assets within the estate and calculating the estate’s total value. Doing this will help you determine if any assets intended for other purposes need to be used to pay debts instead.
Typically, the executor will also publish a Notice to Creditors in the local newspaper early on in the probate process. This is to notify all potential creditors that the decedent has died so they can make a claim against the estate if necessary. Executors do this in case there are creditors that they’re not aware of.
Lastly, the executor will need to pay income tax for the final year of the decedent’s life. If the estate is large enough, the executor may also have to pay estate taxes. The vast majority of executors won’t have to worry about this, however. The threshold for the federal estate tax is $11.18 million in 2019. Just 12 states plus the District of Columbia have state estate taxes, with exemption thresholds ranging from $1 million to $11.2 million.
Another crucial step (and likely the first) for executors is to submit a copy of the will to the appropriate probate court. It is mandatory to file the will. How you’ll determine the appropriate probate court will vary from state to state, but it is most likely the court in the county where the deceased lived at the time of death.
There may be some situations in which it’s better to choose the probate court in the county where the deceased owned property. For instance, if the deceased was living in a nursing home in one county, but all the family and real estate is located in another county, you might choose a probate court in the latter county. It could also be to avoid two separate probate processes – for instance, if the deceased passed away in Florida but owned property in Illinois. Regulations will vary from state to state and county to county. If you’re not sure where you need to file the will, you may want to consider consulting with an estate planning attorney in your area.
When you file the will, the court will give you formal authority to act as the will’s executor. This means that you’ll legally be able to act on behalf of the estate. In some cases, the court may want to conduct its own validation of the will. This is often the case with large, complex estates.
Notifying Beneficiaries and Transferring Assets
This is the job that most people think of when they think of executors. After all the debts have been paid and the proper paperwork has been filed with the court, the executor is tasked with distributing inheritances to the beneficiaries.
This process will begin with a Notice to Heirs, which notifies all beneficiaries that the decedent has named them in her will. This can be a formal letter delivered in person or via first-class mail. If the executor and beneficiaries are all family members, the notification process may be a bit less formal.
The actual transfer of assets can vary from simple to complex depending on the nature of the assets. If property or other large assets are changing hands, that’s going to be a more detailed process than a transfer of money from one bank account to another.
Every estate is different, so it’s practically impossible to create an exhaustive list of an executor’s duties. Odds are you will encounter tasks that you didn’t think of before you took on the role. After you’ve submitted court documents, paid off debts and transferred assets, you won’t be quite done. You’ll still have a few miscellaneous loose ends to tie up.
This could include closing bank accounts, cancelling credit cards or ending cable subscriptions. If the deceased had begun to receive Social Security payments, you’ll have to contact the SSA to cancel those as well. Exactly what you’ll have left to do will depend on the life that the deceased lived and the complexity of their finances.
Acting as a will’s executor can wind up being an awful lot of work. You’ll need to prepare for plenty of paperwork as well as coordination with the probate court and the will’s beneficiaries. You’ll also need to be aware of the vagaries of the particular estate. No two estates are exactly the same. Make sure you communicate with the family of the deceased and the proper probate court to ensure that you’re covering everything. If you do this, you should be able to navigate the probate process without issue.
Tips for Planning Your Estate
- As indicated by the laundry list of tasks above, estate planning can be tricky. That’s why you may want to consider working with a financial professional as you get your own affairs in order. A financial advisor can help sift through the complexities of your finances. SmartAsset’s financial advisor matching tool can help you find a local financial advisor who meets your needs.
- Get a plan in place sooner than later. While it’s common to get a jump on retirement planning, many people assume they can leave estate planning for when they’re older. However, it’s important to have a plan in place should something happen. Once that plan is in place, don’t forget to update it as your financial and life situations change, such as when you buy a house or have children.
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