George Robertson, CFP, CRPS, AIF

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When You Are Named Estate Executor

The duties of an estate executor involve not only varying roles, but also the requirement to act on sensitive issues. Many executors begin with tasks outside the formality of the job, helping to plan the funeral, and reimburse or advance funds to family members who pay for it. If the deceased is to be interred, the deed to a burial plot must be located or a plot must be purchased. It is also your duty to ensure the safety of the decedent's home and property during and after the funeral.

Your "formal" job as executor then begins and will include the following areas of responsibility:

  • To ascertain what the deceased owned, and collect any money due on the decedent's estate.
  • To pay outstanding bills and claims against the estate.
  • To invest assets wisely until they can be distributed according to the will.
  • To deal with assets such as insurance, trusts and any other situations that are not specifically covered in the will.
  • To distribute property according to the wishes of the deceased as expressed in the will.
  • To pay all estate and inheritance taxes.
  • To assure all affairs of the estate are formally settled to the satisfaction of the probate court.

During probate, you cannot exercise your official legal rights as executor until the court establishes that the deceased left a valid will and subsequently issues "letters testamentary" which formally name you as the executor. The probate process can be lengthy, time-consuming and expensive, but is usually fairly simple. As designated executor, you must file a petition for probate in the appropriate court, submitting the death certificate and the original will.

An executor has to work closely with family and lawyers. Routine tasks generally can be adequately handled by a lawyer's staff. An inexperienced executor can obtain help from a personal legal adviser and/or the legal counsel for the estate.

The decedent's property is the first order of business. This includes not only the obvious, such as real estate, cars and bank accounts, but also pensions, insurance benefits from employers and old insurance policies that never lapsed. The deceased may have had accounts in many banks or safe deposit boxes in other states. A little detective work may be necessary to locate certain investments or legal documents in obscure places.

Notification is then given to all creditors, anyone named in the will and, if there is no will, anyone who would inherit something. The purpose is to give potential beneficiaries a chance to protest, claiming that the will is invalid. In most states, a surviving spouse is allowed to challenge a will if he or she was left less than a certain percentage of the estate. If there are no protestations, the probate court will issue "letters."

After the "letters" have been obtained, you can begin to administer the estate. You can transfer the decedent's bank accounts into estate accounts, while stocks and bonds can be transferred from the decedent's name to your name. You need copies of the death certificate and your "certificate of letters" to prove that you have, in fact, been named executor.

Another proceeding called a "will construction proceeding" may be required. This occurs when all parties agree that a will is valid, but there is an argument as to its meaning.

Often some of the decedent's assets are not covered by the will. Joint property, for example, passes to the other joint owner, thus avoiding the probate process. The executor must still keep accurate records, however, because joint property can affect estate tax bills. In fact, it is unwise to transfer property of any kind until all debts are paid. Otherwise, you may be held responsible if the estate is not large enough to pay all the creditors.

You may be required to hire appraisers to judge the value of any art collection, real property or small business interest. You may also want to appraise miscellaneous property, such as furniture or household goods. This will help in the decision to give the property to the heirs directly or sell it and divide the proceeds among the heirs. It is wise to consult first with the heirs regarding which type of distribution they would prefer.

The decedent's insurance company will usually pay insurance benefits promptly upon your completion and submission of the company's claim form with another copy of the death certificate and the original policy. If death resulted from an accident, check the policy; the estate may receive two or three times the face value of the life insurance policy under "double indemnity" provisions.

As executor, until final settlement of the estate, you are responsible for keeping the estate in good order, protecting tangible assets and investing the estate's funds safely. It is not advisable to let funds sit idle, earning no interest, or to invest in speculative stocks or commodities, which are particularly risky. You are responsible for handling the estate's assets prudently. If you do not do so, you may be liable to the beneficiaries, who could require you to make up losses of the estate from your own funds.

Sound judgment and sensitivity should be your aim as you step into the role of executor.

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