An Executor’s Responsibilities
What does it mean when you’ve been named as the executor of someone’s will? What are your responsibilities? How much of your time will be required? Will it cost you money? These are some of the questions that may come to mind when you find yourself thrust into the role of administering the estate of a deceased friend or loved one. Read on to learn more about this important responsibility.
What Is An Executor Expected to Do?
An executor is the person named in a will to administer the estate of the deceased. This includes having the will probated, collecting the decedent’s assets, paying the decedent’s debts, funeral expenses and taxes.
The executor needs to find the estate assets, including social security payments, health care reimbursements, CDs, bank accounts, furniture, jewelry, artwork, pension plans, IRAs, stock certificates, brokerage accounts, real property, partnership interests, automobiles and life insurance. Most often, the identity and location of estate assets can be found in the decedent’s files or personal papers. In some cases, you may have to conduct a search of the decedent’s home for hidden assets or inquire at local banks.
Once assets have been located, the executor must decide which ones to hold and which ones may need to be sold to pay the various estate expenses. An executor is required to manage the assets prudently, and can be liable to beneficiaries and the court if they are grossly negligent or otherwise waste the estate’s assets.
The executor is also tasked with determining the decedent’s liabilities and making sure they are paid. The first step is to determine the total amount of liabilities to be sure the estate has enough money to pay them all. It is important to note that the executor is not required to seek out possible creditors. Generally, the identity of creditors can be ascertained simply by the mail that the decedent receives, such as credit card bills and the like.
Of course, all outstanding income tax liabilities must be paid. The executor is required to prepare the decedent’s final income tax and gift tax returns, as well as returns for any income that may have been earned by the estate during the course of administration.
Once all the assets have been collected, and debts and taxes have been paid, it’s time for the executor to distribute the remaining estate assets as directed by the will. The executor will be required to prepare and maintain an accounting of all of the assets and every penny that has been earned and paid out during the course of the administration. This accounting is the final duty of the executor and is often done with the assistance of the estate’s attorney and accountant.
Do You Get Paid?
Being an Executor is difficult and takes time. Thankfully, you can be compensated for your hard work. Unless the will states otherwise, executors are entitled to a commission: calculated as a percentage of the value of the probate estate, less any specific bequests, legacies or devises. The commission rate in New York is five percent on the first $100,000 in the estate and scales down to two percent on any amount above $5 million. An executor has the right to waive the commission, which often happens with smaller estates and in situations where the executor is a family member or close friend.
What If You Don’t Want to Serve As Executor?
If you find yourself in a position where you are not able to take on all the responsibilities of serving as an executor, the Surrogates Procedure Act permits the nominated executor to file a document called a renunciation with the Court and, thereby, relieve themselves of the job. The Court then appoints another person to act as executor.
While serving as an executor can be a daunting task, the work you do in this important role can have a dramatic impact on the lives of the estate beneficiaries and can be a final way to honor the life of the decedent.