You’ve been named an executor. Now what?
Carrying out the terms of someone’s Last Will and Testament (“will”) comes with a lot of responsibilities. While you will most likely work with a lawyer who specializes in estate planning and probate, keeping track of your obligations can feel overwhelming.
We spoke with Amy Deger, Vice President, Fifth Third’s Estate Settlement Group, who outlined the critical initial tasks executors must take on. “As you get up to speed in your new role, you have three primary duties: gathering all the necessary paperwork, informing all the interested parties and inventorying the decedent’s (person who passed away) property and belongings,” Deger explained.
Executor Checklist: First Steps
- Get a copy of the will. Even if probate — establishing whether a will is valid — is not necessary, in many states, it is required that you deposit the will with the local probate court.
- Obtain several copies of the death certificate. You can usually get a death certificate from the funeral home or local county clerk’s office. You will need to provide copies to a variety of parties throughout the estate settlement process.
- Notify financial institutions. This list includes any banks, investment firms and credit card companies with which the decedent did business.
- Inform the Social Security Administration. The funeral home may do this for you, but they will need the decedent’s Social Security number to do so.
- Get a copy of the most recent tax return. Having the decedent’s most recent tax return on hand will expedite the process of filing the final tax return.
- Make a master contact list. Include everyone named in the will, plus business colleagues, friends, neighbors and relatives. This list will come in handy when you want to communicate funeral arrangements or other estate-related details.
- Secure the property of the deceased. Change the locks and consider installing a security system in their house, particularly if you don’t live nearby.
- Inventory the deceased’s belongings. As soon as possible, write down a complete list of everything he or she owned: cars, computers, furniture, jewelry and the like. You will need this list as you go through the process of selling and distributing the items to beneficiaries. It’s also a good idea to request online passwords for everything from online banking accounts to social media sites to gain faster access.
- Open a checking account in the name of the estate. Deposit any estate income into this account. You can use the funds to pay any final bills, including court costs, lawyer fees and, eventually, the estate’s beneficiaries.
- Keep track of your time and expenses. As executor, you are entitled to reasonable compensation for your time, so record how long you spend on estate-related tasks. You will also want to save any receipts for reimbursement from the estate and to keep with the estate’s final record.
Typically, settling an estate takes about a year, but that timeframe can depend on the size and complexity of the estate.
Understanding Your Responsibilities as an Executor
At first blush, being asked to act as someone’s executor feels like an honor. And it is. After all, you are being trusted to look after a loved one’s best interests after she is gone. But once your duties begin — and you have to fit all the required tasks into your busy schedule for the better part of a year — it can seem like more of a burden. Especially when you learn that performing any of the associated tasks incorrectly could hold you liable to the estate or its beneficiaries.
“Essentially, an executor is charged with protecting a deceased person’s property until all debts and taxes have been paid, and seeing that what’s left is transferred to the people who are entitled to it,” Deger explained.
Of course, the time and effort you spend getting someone’s final affairs in order will vary according to the size and complexity of the estate. Below, we’ve outlined the primary responsibilities of most executors.
- Hire an attorney. Even if the decedent named an attorney in their will, you can choose to work with a different lawyer. So your first step will be to decide whether you will use the named attorney or find your own. Next, the attorney you retain will then file the required documents with the probate court so that you may be appointed the executor by the court and be granted what are commonly referred to as “Letters of Administration.”
- Open a checking account for the estate. Once you have your Letters of Administration, you can open an estate checking account. You will use the funds in the estate account to pay any final bills, including court costs, lawyer fees, to name a few and, eventually, the estate’s beneficiaries.
- Collect any final wages or insurance benefits. You will deposit them into the estate’s checking account.
- Pay off any debts. This can include funeral expenses, final household bills, court fees, taxes and any valid claims filed by creditors.
- Wrap up the deceased’s affairs. Canceling credit cards, closing household accounts and contacting the Social Security Administration are just some of the necessary tasks.
- Distribute the assets to beneficiaries. The executor makes sure beneficiaries get what they are entitled to under the law, and may have to sell property to fulfill any legacies or set up trust(s) specified within the will.
- File tax returns. Not only will you request an employer identification number (EIN) for the estate, but you will also need to file any necessary income, estate tax and gift tax forms. And of course, ensure that any taxes that are due are paid.
- Give the final accounting to the court. You must file any mandated documents with the probate court and beneficiaries before the estate can be officially closed.
Are You Obligated to be an Executor?
It might surprise you to learn that even if someone’s will names you as an executor, you are not required to take the position. People often decline this responsibility for a variety of reasons, including:
- Feeling unqualified to handle the undertaking
- Living too far away to manage the many details
- Wanting to keep the peace with family members
In cases like these, many people choose a neutral third-party as their executor. Sign up for LegacyLink today and get exclusive access to our interactive checklist for Estate Planning.
Fifth Third Bank does not provide tax or legal advice. Please consult your tax adviser or attorney before making any decisions or taking any action based on this information. This information is provided for educational purposes only and does not constitute the rendering of tax or legal advice.
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