It is both an honor and a burden to serve as someone's executor. An executor is entrusted with the responsibility of liquidating someone's earthly affairs, a task large or small, depending on the situation. Essentially, an executor is charged with protecting a deceased person's property until all debts and taxes have been paid and seeing that what is left is transferred to the people who are entitled to it.
The law does not require an executor (also called a personal representative) to be a legal or financial expert, but does require the highest degree of honesty, fairness, and diligence. This is called a “ fiduciary duty, ” the duty to act in scrupulous good faith and honesty on behalf of another person.
Executors have a number of obligations, depending on the complexity of the deceased person's financial and family circumstances. Typically, an executor must:
- Search the deceased person's assets and manage them until they are distributed to the heirs. This may involve deciding whether to sell real estate or securities owned by the deceased person.
- Decide whether or not a probate court proceeding is required. Most jointly owned assets pass to the surviving owner, unproven. And if the deceased person's property is worth less than a certain amount (how much depends on state law), you may be able to go through a simplified probate process.
- Find out who inherits the property. If the deceased person left a will, the executor will read it to determine who gets what. If there is no will, the person in charge (sometimes called the administrator) will have to look to state law (called “intestate succession” statutes) to find out who the deceased person's heirs are.
- File the will (if one exists) in the local probate court. Generally, this step is required by law, even if a trial procedure is not required. For more information on this process, see Nolo's article, "Finding and filing the will."
- Manage the details of the day to day. This may include terminated rentals and credit cards and notifying banks and government agencies, such as the Social Security Administration, the post office, Medicare, and the Department of Veterans Affairs of the deceased.
- Establish an estate bank account. This account will have money owed to the deceased person - for example, paychecks or stock dividends.
- Use property funds to pay for ongoing expenses. The executor may have to pay, for example, utility bills, mortgage payments, and the homeowner's insurance premiums.
- Pay debts. If there is a probate process, the executor must officially notify the creditors of the will, following the procedure established by state law.
- Paying taxes. A final income tax return must be filed covering the period from the beginning of the tax year to the date of death. State and federal tax returns are required only for large farms.
- Monitor the distribution of the deceased person's property. The property will go to the individuals or organizations named in the will or to those who have the right to inherit under state law.
