If a loved one asks you to be the executor of their estate, think carefully before you take on this responsibility. While you have the option of declining the request, the person reaching out likely considers you to be responsible and detail oriented. An executor of an estate typically helps file paperwork, close accounts and distribute the assets of the deceased.
As an executor of an estate, you’ll need to:
— Locate important documents.
— Request copies of death certificates.
— Make funeral arrangements.
— File the will in probate court if necessary.
— Set up an estate account.
— Notify organizations of the death.
— Pay off debts.
— Manage and distribute assets.
— File a tax return.
Consider the following criteria as you get ready to be an executor of an estate.
What Is an Executor?
An executor is the individual who helps to finalize the finances and assets for a deceased person. As executor of an estate, you’ll ask for copies of the death certificate, notify authorities such as Social Security to stop benefits and may be involved in arranging the funeral. You will need to follow the instructions in the will to administer the estate. You’ll organize the assets, pay off any debts, close accounts like utilities and cable or phone plans and distribute money and possessions to beneficiaries.
The Responsibilities of an Executor
It’s possible that after the death of a loved one, you’ll be asked to act as the executor. If you decide to accept the position, the starting point will be to locate the important documents, including the will. You may have to ask others, such as the loved one’s spouse, for help locating all the necessary information. “As an executor, you’re acting in a fiduciary capacity,” says John Cocklereece, Jr., an attorney at Bell, Davis & Pitt in Winston-Salem, North Carolina. “Your efforts are directed toward the interests of the stakeholders in the estate, principally the creditors and heirs of the estate.” Depending on the size of the estate, you may decide to hire an attorney to help with the legal requirements.
The time commitment required to be an executor can be extensive. If you are asked to be the executor before your loved one passes away, take some time to locate the original will. Read through it to make sure you understand the terms, and be sure to know the locations of the assets and liabilities. Request instructions for finding important documents, and write down account information, including passwords and the answers to security questions. “Have a conversation with the to-be decedent about their desires regarding their estate plan and important family dynamics,” Cocklereece says.
There are certain requirements that must be met to be an executor of an estate. “A sole executor typically has to be a U.S. citizen, although a noncitizen can act with a U.S. citizen as co-executor,” says Patricia J. Russell, an attorney at Twomey, Latham, Shea, Kelley, Dubin & Quartararo in Riverhead, New York. “Anyone convicted of a felony is not permitted to act as executor, even if they are named in the decedent’s will.” The exact rules vary, depending on the state.
After the death, it typically takes at least six to 12 months to carry out all the administrative work related to the estate. “You will not be working every day on the estate, but there will be times when your attention to estate work is necessary,” Cocklereece says. “If you don’t have the time, don’t agree to serve.”
Executors may be compensated for their work. “Most states have statutory commissions that the executor can collect,” Russell says. “The executor should be aware that these commissions are considered as earned income for their services and must be reported on their personal income tax returns.”
Be Ready for Potential Conflicts
Due to the number of parties involved, complications can arise. Some of those receiving distributions, for instance, may object to the divisions laid out in the will. “If a will bequests unequal amounts to the decedent’s children or disinherits one or more children, the executor should be prepared for an objection to the will,” Russell says. It may be necessary to lock up the house or other possessions until you are ready to distribute them to avoid arguments or having beneficiaries taking items that are not assigned to them, per the instructions in the will.
The emotions that surround the event can also create tension, especially if you were close to the decedent. “Not only are you processing the grief, now you’re taking on a task that is time-consuming,” says Randa Hoffman, founder of Radiant Wealth Planning in Newport Beach, California. It might be difficult to sort through the financial terms and details. “To top it off, you might have siblings and family members that are attacking you for what you’re doing, even if what you’re doing is exactly what you should be doing,” Hoffman says.
Take Care to Be Thorough
Ask for help if tasks seem overwhelming or you don’t understand certain instructions on accounts or the will. Others can oversee details and make sure nothing is missed. In addition to collecting as much information as possible about assets, look in unexpected places. “Go to your state’s unclaimed property website and do a search to see if any assets have been escheated to the state,” Hoffman says. When Hoffman did that for a client whose father had passed away, they found $300,000 in cash waiting to be claimed.
Go through rooms in the home carefully before putting the place up for sale or taking other steps with the property. In one case, “My client found old stock certificates tucked away in the back of their father’s sock drawer,” Hoffman says. A different client found the deed to the home in a bread box. “It’s amazing what people use as their secret hiding spot,” Hoffman says.
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