Executor Of Estate: A Beginner’s Guide

After a loved one passes away, things can feel overwhelming: arrangements have to be made and wills need to be read, all while grieving a loss. To make it easier for those the deceased leaves behind, many people choose to create a will and appoint an executor to ensure the terms of the will are carried out. An executor can be a friend, a family member, a lawyer, or another party.

It’s a big deal to choose an executor of estate. So, let’s take a closer look at their responsibilities, what they can and can’t do and how to choose one.

What Is An Executor Of Estate?

An executor of estate, or executor of will, is someone appointed to oversee a deceased person’s final financial affairs. Usually, executors are named by the deceased in their will. They manage and protect the estate's assets, which is why many name family members, close friends, accountants or lawyers to act as executors.

The estate you leave behind is everything you own, including bank accounts, cash, investments and homes. The executor ensures these assets are delivered to the recipient(s) outlined in your will.

How Does An Executor Work?

If you have a will, the executor is responsible for carrying out your wishes through estate administration. An executor will begin the process by determining whether the deceased has outstanding debts or liabilities. If any debts or liabilities are uncovered, the executor will pay the bills with the estate’s assets.

If the estate’s assets can’t cover the outstanding debts, the estate may be declared insolvent. In that case, the estate’s remaining assets will likely be distributed among creditors to cover debts.

After all debts are paid, the executor can transfer the remaining assets to the beneficiaries. Creating a will is critical if you want any control over how your assets are distributed.

Estate Planning

Estate planning is a broad strategy for determining how assets will be protected, managed and distributed after a person’s death. Executors are an essential component of a proper estate plan.

When an executor is in charge, they handle all estate administration, including managing and protecting estate assets and paying debts and taxes. Plus, the executor ensures that all assets outlined in the will are accounted for and transferred to the appropriate recipient.

What Happens To An Estate Without An Executor?

If an executor isn’t appointed or can’t serve as executor, the estate will go through probate even if there’s a will. Probate is a legal process where a court oversees the distribution of a deceased’s assets.

Most people prefer to appoint an executor rather than rely on the probate process so their wishes are implemented without involving a court. Appointing an executor can significantly reduce timelines and may lower the risk of conflict between family members.

What Are The Responsibilities Of An Executor Of An Estate?

An executor of an estate is responsible for carrying out the deceased person’s wishes. The executor has a fiduciary duty to act in the estate's best interests and any beneficiaries.

An executor has the following responsibilities:

Collect A Death Certificate

The first step is to collect a death certificate. The Centers for Disease Control and Prevention offers a helpful tool that can direct you to where you can get a death certificate in your state.

Ask for at least a dozen copies. You’ll need a certified death certificate to perform many actions, including closing bank accounts or filing life insurance claims.

Get A Copy Of The Will And File It With The Probate Court

As the executor, you’ll need to file a copy of the will with the county probate court. If you’re named executor of the estate in the will, the court will officially appoint you as the executor.

A copy of a will is a roadmap for an executor to follow. If you don’t know where the will is, ask family members or contact the lawyer who prepared it. Obtaining a copy of the will is essential because the document outlines who will inherit property.

Inform Government Agencies, Banks And Others Of The Decedent’s Death

An executor must notify creditors, beneficiaries and heirs of the deceased’s death. In addition to letting these parties know, you’ll also need to let the federal government know to stop any government benefits.

You must request that the U.S. Postal Service forward any mail to your address. You must contact the state’s department of motor vehicles to cancel the deceased’s driver’s license. You must notify any banks to close out any accounts, and insurance companies will need this information to cancel any existing policies.

Beyond canceling bills and subscriptions, you should also contact the major credit bureaus (Equifax®, Experian™ and TransUnion®) to add a death notice to the deceased’s credit report. Always be prepared to provide a certified death certificate throughout this process.

Represent The Estate In Court

In some cases, the executor may need to appear in court to represent the estate. An initial proceeding will appoint you as executor and allow the probate process to continue.

If there is a dispute between heirs or challenges to the will during the process, you may wind up back in court to sort out the opposing claims in front of a judge. You’ll need to appear at the closing proceedings to finalize the probate process.

Open An Estate Bank Account

It’s a good idea to open an estate bank account for the probate process. You can use the account to pay all bills and debts. As the executor, you must ensure that bills, like mortgage payments or insurance premiums, are paid until the estate is finalized.

File An Inventory Of The Estate’s Assets

In many states, the probate court requires the executor to file an inventory of the estate’s assets and liabilities so the court has a clear picture of what the deceased left behind. With that information, the court can distribute the assets appropriately.

Maintain The Property Until It’s Distributed Or Sold

The executor must maintain any property included in the estate until it’s distributed or sold. Additionally, any personal property included with the estate must be found and stored until distribution.

Pay Any Estate Debts And Taxes

As we mentioned, the executor must pay any estate taxes or debts before the distribution of assets can begin, which may require you to file an income tax return for the estate. As you navigate the tax obligations of an estate, consider working with a tax professional to find the most efficient solutions for your situation.

Distribute The Assets

Finally, you’ll distribute the assets to the recipients identified in the will. In some cases, you’ll need written permission from a court before you can proceed.

As you distribute the assets, collect documents from beneficiaries acknowledging they are in possession of their inheritance.

What Can’t An Executor Of Estate Do?

Due to the nature of their responsibilities, executors have the power to execute all the terms of a will. However, there are still limits to what they can do:

Carry Out The Will Before The Decedent Dies

The executor has no legal right to make decisions about the estate before the individual dies – even if there’s a will in place. It’s critical to wait until the death of the person who created the will before accessing or distributing the estate in any way.

Manage The Estate Before Court Approval

The first step of closing the estate involves getting court approval to manage the estate. Many financial institutions will block you from accessing a deceased person’s assets without court approval.

Sign An Unsigned Will

You can’t sign a deceased person’s unsigned will. A will is only valid if the deceased signed it before their death. Without a signed will, state law will decide what happens to the estate’s assets.

Change The Will’s Terms Or Beneficiaries

Executors don’t have the authority to change the terms of a will or the beneficiaries listed in the will. You can only carry out the wishes of the deceased as stated in the will.

How To Choose An Executor: Helpful Tips

When choosing an executor, you can technically select anyone you want. To qualify, the person must meet the state’s criteria. For example, you cannot select a former felon or minor to be your executor.

Many choose close friends or family members. However, hiring a professional is also a good option. Here are some helpful tips to consider when choosing an executor:

• Find a responsible person: An executor must stay on top of court proceedings and financial details. It’s critical to find a responsible person you trust to carry out your wishes.
• Make sure your executor is financially stable and in good standing with their credit: An executor must have solid personal finances. Many courts won’t allow an executor with multiple creditors or liens against them to proceed as an executor.
• Choose someone who can be objective: Carrying out a deceased person’s wishes can be an emotional experience. The right executor needs to be able to make objective decisions for an estate’s assets and heirs.
• Don’t select an ineligible person: Most state courts will not approve minors or former felons as executors. Check the state’s rules to make sure you select an eligible person.

How To Become An Executor Of An Estate

If you want to become the executor of an estate, there are two paths.

If you’re named executor in a will, you’ll need to file a copy of the will with the court. You'll likely receive official approval if you meet the state requirements for an executor.

If you weren’t named executor in a will, you’d need to file a Letter of Administration with your state’s probate court. The court will ask questions about you and your relationship with the deceased. The court will either appoint you as executor or appoint someone else.

FAQs About Executors

Here are some common questions people ask about executors of estate.

Do you have to serve as an executor?

No, you don’t. A person named as executor may not want to serve for a variety of reasons, including location. You may live across the country from the deceased. Or you may want to stay out of any potential disputes between the deceased’s heirs over the distribution of assets.

You can give up your role by signing and notarizing a Renunciation of Nominated Executor form.

Do you get paid for being an executor?

Yes, you’re entitled to compensation as executor. Sometimes the amount is specified in the will. If it isn’t, state law should provide additional guidelines.

What is the difference between an executor and a trustee?

Generally, an executor’s job is to ensure the deceased’s money gets distributed to the right people. Doing that may involve putting the deceased’s money in a trust if they set one up.

A trust is an arrangement that allows a third party to manage funds on behalf of a beneficiary. The trustee is the individual responsible for managing the funds in the trust. The classic example is a trustee who manages a trust when the beneficiary is a child.

Can you become the executor of an estate without a will?

Technically, no, because executors are appointed. But you can petition the court to become the administrator of the estate. If you’re named administrator of the estate, your responsibilities will be virtually identical to those of an executor.

The Bottom Line

An executor is an integral part of any estate plan. Understanding the extensive responsibilities ahead of time can prepare future executors for what lies ahead.

Whether you’re a future executor who wants to keep your finances in good standing or you need to keep track of every asset and debt to draft your will, download the Rocket Money℠ app today and take control of your finances.