What Are the Duties of an Estate Executor?
Estate executors are trusted individuals who handle the settlement of a deceased person's estate. The duties they perform ensure that property and other elements of the estate are distributed according to both the provisions of any existing will and current probate law. As an estate executor, a person must perform specific fiduciary duties.
If a person does not specify the person they want to act as executor prior to their death, and if no one else comes forward to volunteer for the duties, the court appoints an estate administrator to carry out the executor's tasks.
Primary roles
Estate executors perform multiple roles for the deceased's estate. These roles include but are not limited to:
- Deciding if probate is necessary given the estate status.
- Entering the will of the deceased into the probate court.
- Identifying, locating, securing and listing the assets and property of the deceased, including making insurance arrangements.
- Notifying insurance companies of the death and providing copies of the death certificate to initiate payments to beneficiaries.
- Notifying non-insurance agencies or companies of the death in writing and, if necessary, terminating accounts. This can include the Social Security Administration, Medicare, United States Postal Service, and the United States Department of Treasury.
- Notifying creditors and heirs of the death in writing, including a newspaper announcement.
- Examining the existence of partnerships and similar agreements, and taking steps to meet clauses related to the estate within those agreements.
- Providing tax information for the estate to a qualified lawyer or accountant by filing deadlines, applying for an Employer Identification Number (EIN) for the estate, and paying all taxes owed on the estate.
- Creating a list of all debts against the estate, including the funeral costs, and submitting the list to the court.
- Paying all debts and dispersing property and assets to heirs and creditors according to the will of the deceased and current property law. In order to accomplish this, it may be necessary to sell the deceased's property or assets.
- Appearing in court as a representative of the estate if proceedings are necessary regarding the deceased's will.
- Establishing a bank account in the name of the estate for distribution of property and assets.
- Keeping records of all matters relating to the settling of the estate for possible review by the probate court, heirs and creditors.
- Responding to information requests by creditors, heirs, attorneys and officers of the court.
- Making arrangements for minor children of the deceased.
Fiduciary duty and legal obligations
An executor has a fiduciary duty to the deceased. This means that they have to act in the best interest of the deceased at all times. This sometimes pits the executor against friends and family members of the deceased if the deceased's wishes were contrary to what friends and family members want.
Fiduciary duty also means that the estate executor cannot benefit from his work beyond what is allowed in the deceased's will or state estate executor fee law.
Estate executors also take on legal responsibilities when they handle an estate. For example, they can be held liable for any taxes not paid related to the estate. Additionally, being an executor takes considerable time and effort—it is not unusual for it to take a year or more to close an estate. Executors may have to deal with irate family, friends and creditors of the deceased as well.
Payment of executors
It is legal for an estate executor to charge a fee for their services, given the extent of responsibility the executor accepts. The state typically sets the fee, but roughly three percent of the value of the estate is standard. Courts have the right to determine what is reasonable compensation for acting as executor if state law does not specify a fee limit numerically. Individuals also may specify in their wills how much they want their executors to receive if they feel the executor deserves more than the state guideline.
Taking on the responsibility of being an executor is a lasting way to honor the final wishes of someone who has passed away. It’s also a lot of hard work. Be sure you are prepared to undertake these duties before agreeing to be the executor of an estate.
You might also be interested in Passing Assets to Your Heirs Without Probate and With Personal Liability Protection.
