Being asked to serve as the executor of a loved one’s estate is flattering, but it is also a big responsibility and a lot of work. As the executor, you are responsible for taking care of all of the financial and legal matters of the estate. The job will require a lot of time and, depending upon the complexity of the estate and the family situation, could be challenging.
Some of the tasks include:
- Filing court papers to start the probate process to determine whether the will is valid.
- Making a complete inventory of everything in the estate.
- Obtaining an estate tax ID number, opening an estate bank account and using the estate funds to pay bills, including funeral costs and medical bills.
- If the estate includes a home, maintaining the home and paying the mortgage, taxes, etc.
- Terminating credit cards, notifying banks and government agencies—including Social Security—and the post office.
- Preparing and filing income tax returns for the last year of the person’s life, unless they filed them already.
- Distributing assets as directed by the will.
Your first task is to locate the will and any important documents and financial information. You will need the will, deeds, titles, brokerage statements, insurance policies, etc.
No matter what, you will want to work with an estate planning attorney who can guide you through the process. Every state has its own laws and timetables for the executor’s responsibilities, which the attorney will be familiar with. Plus, the estate pays for the attorney so you don’t have to worry about costs.
If possible, find out if there are any family conflicts before the loved one passes. If there are potential problems, it may be better for the loved one to tell who will be inheriting what before they die. If there is no plan for asset distribution, the person who is asking you to be the executor needs to meet with an estate planning attorney as soon as possible and have a plan created, with all of the documents necessary for your state.
The executor is entitled to be paid a fee from the estate. In most states, that fee is set at a percentage of the estate’s value, depending on the size and complexity of the estate. If you are both an executor and a beneficiary, you may want to forgo the fee, because fees are taxable, but, in most states, inheritances are not.
Reference: Review Times (Sep. 6, 2020) “An executor’s guide to settling a loved one’s estate”