The whole of a person’s belongings, property, and assets are collectively referred to as a person’s estate. When a person dies, they will need someone to manage and distribute all of their property, as well as to ensure that their debts or other financial matters are settled. The person whom they appoint to perform these tasks is known as an executor.
To be more specific, the executor of an estate is the person named in a decedent’s will or other relevant documents. The executor is responsible for overseeing the decedent’s assets after death. The term is frequently used in matters concerning wills, trusts, and probate. This person is also sometimes referred to as a personal representative or an administrator.
Although the law does not require that the executor of an estate must be a legal or financial expert, executors are generally required to fulfill many legal and financial duties. These include having a “fiduciary duty” to the decedent’s estate. As such, it may be useful to appoint an executor who has a good working knowledge of such things.
If a decedent did not name an executor in their will, or if they passed away without a will, then the court will generally appoint someone to act as the executor. Additionally, a person may apply to become the executor in some specific circumstances.
What Are Some Duties of the Executor of Estate?
To reiterate, an estate executor is a person who is specifically named and entrusted with the task of overseeing another’s personal estate. Generally speaking, this includes all property, funds, and money that is owned by the estate’s owner, including any debts and taxes. The estate executor is appointed to manage all of these when the estate holder dies, or becomes incapacitated and is therefore unable to manage their own legal and financial affairs.
An executor’s duties are numerous and can vary dramatically depending on state laws, as well as the size of the estate to be distributed and the wishes of the decedent. When an estate’s owner dies, the executor of the estate must ensure that all of the decedent’s taxes and debts are paid. Then, they must distribute what is left to the appropriate beneficiaries. As previously mentioned, the executor has a fiduciary duty to act in a manner of good faith and impartiality in making sure the desires of the decedent are carried out to whatever extent possible. This is an executor’s basic duty.
What this means is that they must take reasonable steps in order to fulfill whatever instructions the decedent has left behind, regarding their property and assets. The executor also has a duty to refrain from certain types of actions or conduct, such as using the decedent’s assets for their own personal gain or profit.
Some examples of other various steps and procedures may include:
- Tying up day-to-day loose ends. The executor must notify financial institutions, such as banks, lenders, and brokerages of the person’s death. This includes governmental institutions, such as the Social Security Administration, and Medicare and Medicaid. They must also ensure that they terminate any existing credit cards and leases;
- Using the funds from the estate to pay any ongoing or outstanding expenses. Generally speaking, this includes paying any property expenses related to property still held within the estate;
- Paying off debts and taxes. The executor must file a final income tax return on behalf of the decedent, and creditors must be notified of any probate proceedings;
- Setting up a bank account for money owed to the deceased. The executor should ensure that there is an estate bank account that can hold money. This will be collected for the decedent’s assets, such as any paychecks, stock dividends, etc.;
- Making arrangements for probate proceedings (if necessary): The executor should familiarize themselves with the decedent’s state laws regarding estate distribution. They should be aware of how much the estate must be worth in order for probate to be required under state laws, among other things;
- Determining who inherits what property: If there is a valid will in place, the executor should use that as a reference when determining who is to inherit what property. If no valid will exists, the court will refer to state law in order to determine who is entitled to inheritance. It is important to note that the executor is not deciding who inherits, but rather they are determining who was mentioned as a beneficiary in the decedent’s will;
- Distributing property whenever possible: Even when the probate process is required for specific types of property, other property could likely be distributed immediately to the beneficiaries. This should happen whenever possible to ensure a rapid distribution process as well as to avoid a number of potential issues;
- Locating and managing the decedent’s assets during the probate process. Some property may need to be located and identified before it can be distributed. The executor will most likely be someone close to the decedent, and therefore would most likely be aware of the location of such assets; and/or
- Supervising the distribution of property and other assets to the beneficiaries named in the will. The decedent may have left very specific distribution instructions regarding certain beneficiaries, or certain items of property. It is the executor’s responsibility to ensure the decedent’s wishes are met.
When Does the Executor of an Estate Assume Their Duties? What if the Executor Breaches Their Duties?
In the majority of cases, the executor assumes their duties upon the death of the estate holder. This is generally done in accordance with instructions as contained within the person’s will.
In other cases, the executor may begin to assume their duties if the estate holder becomes physically, emotionally, or psychologically incapacitated. This is similar to cases in which a power of attorney is needed for medical reasons. Alternatively, the executor may assume their duties according to specific instructions issued by the estate holder, according to the estate holder’s preferences.
A breach of executor duties can lead to legal consequences against the executor. Executor liability for losses will generally require them to pay damages to the estate’s beneficiaries, as well as any other affected parties. The executor may also simultaneously be removed from their service as an executor, and be replaced by a different person. In some cases, the executor may face various fines and other civil consequences in connection with a violation, such as fraud or other legal violations.
An executor may also be removed from their role if they are not sufficiently fulfilling their duties. As previously mentioned, the executor must act in good faith and exercise impartiality when performing their duties. Failure to do so may result in them being removed from the position.
Generally speaking, the person who is requesting a removal of the executor must file a request with the court. This request should provide a valid reason for the removal, as well as any supporting evidence for the removal.
Do I Need a Lawyer for Help with Estate Executor Duties?
It is important that an executor has a good understanding of how executor duties work, for the smooth management of any estate. Thus, you should consult with a skilled and knowledgeable estate lawyer if you are facing any legal issues, specifically those involving an executor of estate duties.
An experienced and local estate attorney will be best suited to provide you with legal advice on how to ensure that such duties are being followed in accordance with varying state laws. Additionally, an attorney can also represent you in court, should you have to file suit because of a breach of estate executor duties, or should a lawsuit be filed against you as an executor.