What Exactly Does an Executor Do?

The executor - or Personal Representative - is usually a spouse, close family member, or trusted friend. If no such person is available, a court can appoint a qualified compensated person under state law, according to a recent article from The Street entitled “Top Duties of an Estate Executor and How to Carry Them Out.”

The executor needs to be trustworthy and organized since many details are involved. Depending on the complexity and size of the estate, the executor’s duties could include additional tasks. However, the following are the five main categories:

• Filing the will with the court
• Gathering documents
• Paying debts and taxes and collecting from any debtors
• Closing out Social Security accounts, insurance policies, and retirement accounts; and
• Maintaining any real estate property until its sale or ownership transfer to an heir.

Once the Personal Representative files the will with the court, the court will determine the will’s validity. If the court finds the will valid, it will issue Letters Testamentary. The Letters empower the executor to go forward with their tasks as directed by the will.

Gathering documents.

The executor needs to gather documents, including:

• Death certificates
• Deeds and titles of ownership
• Trust documents; and
• Insurance policies.

Combine assets and close accounts.

The executor needs to contact the decedent’s banks, credit card companies, lenders, leasing companies, and any accounts holding assets.

The executor also applies to the IRS for an estate tax ID number, also known as an EIN, and opens an estate bank account. The executor deposits any assets into this account, including proceeds from selling any assets.

The Personal Representative may help the spouse or dependent apply for benefits if there is an eligible survivor. The executor must notify Social Security Administration (SSA) of the death. Depending on the date of death, SSA may recoup the last Social Security deposit from the decedent’s bank account.

Collect money owed and pay debts.

The executor may help beneficiaries file for life insurance proceeds.

The Personal Representative needs to examine and adjudicate any outstanding debts owed to the decedent and handle any creditor claims. The obligations are not the financial responsibility of the executor and should be paid only from funds in the estate account.

With good planning, the executor can ensure an orderly and uncontested flow of assets from the deceased’s estate to heirs. This includes consultation with the testator while they are still living and can discuss their wishes and plan for a smooth transition. This is certainly not the most comfortable discussion. However, it can make the process easier for all concerned if done with kindness and care in advance.

With even better planning, you can avoid probate and the need for an executor entirely. Book a call, and we can discuss your unique situation.

Reference: The Street (Dec. 5, 2022) “Top Duties of an Estate Executor and How to Carry Them Out”