If a loved one has died and named you as the executor of their estate, you may be confused and overwhelmed as to what that means. What does the executor of an estate actually do? Isn’t everything in the will? Shouldn’t the lawyer do all of that?

First of all, it may be helpful to define what an executor is. It’s a person named in the will to carry out the wishes of the deceased. If there is no will, the executor is appointed by the court, usually the closest living relative. You don’t have to accept the job, even if you were named in the will. If you botch it, you can be held liable by the beneficiaries, so make sure you’re prepared for this important job.

You will also be responsible for settling any debts owed by the deceased. You’ll be in charge of distributing any assets. Think of yourself as the deceased person’s last accountant.

There are four main stages of probate that you will have to work through, if you do decide to serve as the executor of the will.

Protecting estate property and finding the will

The first step, and probably the most important, is to find the will. After that, your responsibilities are:

• Cancel the deceased’s bank accounts, credit cards, and notify government agencies.
• Protect valuables. Consider changing the locks on the deceased’s house or apartment.
• Collect the mail and make arrangements to forward future mail to you.
• Get access to the deceased’s house or apartment.
• Gather all medications for proper disposal.
• Procure death certificates.

Hopefully, you’ve discussed where the will is located before the person died, but if you didn’t, you’ll have to go looking for it:

• Search in obvious places such as file cabinets, desk drawers, etc. Where did the deceased keep important papers?
• Safe deposit boxes. If you’re part of the immediate family, the bank may give you access. If not, you can ask the probate court to write an order allowing you to check for a will.
• The deceased’s lawyer, if they had one.

If they died without a will, you will have to check with your state’s laws to determine how to proceed, as every state is different.

The next task is to gain access to the deceased person’s home. This is not only to protect the home from thieves, but also family members who may be inspired to help themselves to valuables. Remove all the valuables and make a list.

Obtaining the death certificate is also extremely important. The funeral home can get certified copies, or you can get copies from the state where the person died. Get multiple copies, since every financial account the deceased had will only release the funds when they have a copy of the death certificate.

Hire legal representation and submit the will to the court

You’re going to need to find an estate planning lawyer, and preferably one with a lot of experience dealing with probate. Otherwise, it could take years to completely resolve the estate and distribute the assets. Also, angry family members could hold you personally accountable if something goes wrong.

Track all expenses. The executor uses the estate’s money to pay for funeral and burial expenses. You will also need to use the estate money to pay any debts the deceased owed. If the deceased was receiving Social Security benefits, you need to notify the Social Security Administration. And final income taxes for the last year the deceased was alive need to be filed. Make sure you keep the expenses separate from your personal accounts. You can reimburse yourself for out-of-pocket expenses, but don’t mix up the accounts or you will have a financial mess on your hands, as well as potential legal ramifications.

Let beneficiaries know and provide copies of the will. They need to sign and return the paperwork and you need to make sure it gets back to the attorney. If this brings up cases of sibling rivalry, you are not alone. According to Ameriprise, 15% of siblings fight over money, and 70% of those fight over the inheritance.

Administering to the estate

Everything is moving along—you’ve been recognized as the executor of the estate by the court and hopefully your family, and now you can settle the estate.

Every estate is different, and some are more complex than others. You may need to manage:

• Stocks
• Bonds
• Homes, vacation homes, timeshares
• Any commodities
• Antiques
• Artwork
• Life insurance
• 401(K)s, IRAs, and other retirement accounts
• Digital assets (social media, account log-in information, email accounts)

Not every estate will contain all of these things. In many states, courts require the executor to submit a detailed inventory of all assets during the probate period. You’ll need to liquidate the accounts and pay the debts. Try to find old tax returns to make sure you don’t miss anything. You will also have to list any property for sale, clean up the house (or hire someone) and take out the trash. The executor is responsible for upkeep of property until it is distributed or sold. Plus, the property will sell for more money if it’s tidy.

Pay the beneficiaries and yourself, then close the estate

Take heart, you’re almost done. All you have to do now is:

• Make a list of all the estate’s assets, debts, and expenses.
• Send a report of this accounting to the beneficiaries for them to sign.
• Pay yourself (you get a commission).
• File the final accounting with the court.

The beneficiaries have to sign your accounting of all the expenses. This means they agree you did your job as executor of the will appropriately. Then they get their bequests.

You may be wondering how much the commission is, if it’s not stated in the will. Each state has a fee schedule you’ll need to refer to, which is some percentage of the estate. This commission will count as income, so make sure you claim it on your income taxes.

Bottom line

Serving as the executor of someone’s will can be fraught with legal issues, family issues and other conflicts. If you need the advice of a Certified Financial Planner®, contact us at Retirable.

Frequently asked questions

What is an executor?

An executor is a person appointed in a will by the deceased (the testator) to carry out the directions and requests of their will. The executor is responsible for managing the estate through the probate process until all debts and taxes have been paid, and the remaining estate is distributed to the heirs.

How do I know if I've been named an executor?

You are typically notified by the testator (the person who made the will) that you have been named as an executor. After the testator's death, you will be formally notified through the probate court process or by the attorney associated with the estate.

What are the first steps I should take as an executor?

• Obtain a copy of the death certificate: You will need multiple copies for various institutions.
• Find and secure the will: Determine if the will was filed with a probate court or is in a safe deposit box or another secure location.
• File the will with the local probate court: Even if probate isn't necessary, the will typically needs to be filed.
• Notify banks, government agencies, and creditors of the death: This includes the Social Security Administration, the deceased's employer, credit card companies, and others.

Do I need to hire a lawyer to help with probate?

While not always required, hiring a lawyer experienced in estate law can be extremely helpful, especially for larger or more complicated estates. A lawyer can guide you through the probate process, help with legal filings, and provide advice on fulfilling your duties properly.

How do I handle the estate's debts and bills?

As the executor, you will need to settle the estate's debts before distributing assets to the heirs. This includes:

• Setting up an estate bank account to pay ongoing bills.
• Notifying creditors and paying valid claims.
• Filing final income taxes for the deceased.

What if there's not enough money in the estate to pay all the debts?

If the estate cannot cover all its debts, it is considered insolvent. Each state has laws determining the order in which debts should be paid when funds are insufficient. Generally, secured debts like mortgages are prioritized, followed by funeral expenses, taxes, and unsecured debts.

How do I distribute assets to the heirs?

After all debts and taxes have been paid, distribute the remaining assets according to the instructions laid out in the will. This may involve transferring titles, setting up new accounts, or physically handing over property.

What records should I keep?

Maintain detailed records of all transactions, including debts paid, assets collected and sold, and distributions made to heirs. These records are crucial for finalizing the probate process and may be needed for tax purposes.

How long does the probate process take?

The duration of the probate process can vary widely depending on the complexity of the estate, the efficiency of the court system, and whether there are any disputes among heirs or creditors. It can range from a few months to several years.

This blog post is for informational purposes only. Nothing herein is intended to be legal advice.