3 Key Responsibilities of an Executor When Managing Probate

When you agree to be the executor of a will, there are plenty of responsibilities you must take on. (See our 6-Step Process for Probate for more). Here, we break down the three key responsibilities of an executor when managing the probate of an estate.

First, Collect the Assets.

Collecting assets seems straightforward, but there is a lot to consider. Questions to ask when beginning the process:

Does the decedent have real estate? Where are those documents kept?

What bank accounts does the decedent have? Is the information readily available?

Did the decedent invest in anything? What do those contracts entail?

How much personal property does the decedent own? How will this all be distributed?

Are the assets a part of joint tenancy or in a trust? (These items are not subject to probate.)

As assets are collected, keep a comprehensive budget, ledger, and/or catalogue of everything. This includes all banking information, real estate deeds, bills, phone numbers, emails, and other real property. Stocks, titles, vehicles, and other legal documents must also be transferred into the name of the executor.

During this process, a court-appointed probate referee will valuate all non-cash items with fair-market value.

Then, Pay Off Debts.

Once collected and catalogued, the executor must enumerate and pay all debts before anything can be distributed. This may include credit cards, loans, utilities, and other liabilities. Creditors may also make claims against the estate, usually within four months of appointment unless they were not aware of the death. Make sure to identify assets that are protected from creditors and be prepared for possible lawsuits should you reject a claim.

Most debts, including funeral costs, are usually paid for by the estate. It’s sometimes necessary to sell assets to cover these debts, though insurance policies may cover certain debts as well. If assets do need to be sold, beneficiaries must be notified at least fifteen days before the sale and a court may get involved if there is a dispute or objection. Some assets, such as student loans or Medicaid benefits, may be transferred or forgiven depending on the lender, while others, such as stocks, bonds, or real estate, must get court approval before selling.

Finally, Handle All Necessary Taxes.

They say the only two guarantees in life are death and taxes. Unfortunately, the decedent isn’t immune to taxes after death. There are several federal and state taxes, estate taxes, sales taxes, gift taxes, pre-death income taxes, and fiduciary taxes that must be paid out of the estate before assets may be distributed to beneficiaries.

Remember, laws and taxes change constantly so it might be better to reach out to a tax accountant to make sure all paperwork is filed correctly and laws are being adhered to.

Insolvency

If there are not enough assets to cover all debts, the executor must declare the estate insolvent by petitioning the court. If they fail to do so, the executor may be held personally liable for any taxes or debts that may still be owed.

Tags: Assets, court, debts, Estate, executor, Probate, taxes, Trusts, Wills
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