Ten Important Responsibilities of an Executor
When a Last Will and Testament is drafted, one of the most important considerations is the naming of an Executor or Executrix. Presumably, the Executor or Executrix is well-known by the decedent. However, this person often has little knowledge of their responsibilities. While not an exhaustive list, below are 10 important responsibilities of an Executor or Executrix.
1. First Steps
- Locate and study the Last Will and Testament, along with any Codicils to the Will. Arrange to meet with the decedent’s attorney, family members, and other advisors.
- Locate copies of the decedent’s income tax returns and contact their CPA for additional tax information.
2. Estate Protection
- Collect and safeguard any valuables.
- Locate any electronic devices and secure them.
- Be mindful of the reality of computer hackers and privacy concerns as you gather and preserve the decedent’s financial records and papers, particularly if stored in an electronic format.
- Arrange to have the Will probated (filed with the Court).
- Decide whether out-of-state estate administration will be required.
- Obtain formal appointment from the Court (“Letters Testamentary”).
4. Assemble and Inventory Assets
- Transfer bank and securities accounts to the estate.
- Collect any money owed or payable to the estate.
- Locate and take control of all other assets; check unclaimed property lists.
- Compile a detailed list of estate assets, including those not passing by Will.
- Establish market value of all assets on date of death. If needed for tax purposes, revalue assets six months after death.
6. Estate Management
- Analyze the estate’s cash needs. Decide how you will raise the needed funds.
- Collect dividends, interest, rents and other estate income.
- Look after real estate and supervise business interests.
- Maintain detailed records of all estate transactions.
- Notify estate creditors as required, and pay all just claims.
- Pay all final medical bills and apply for medical reimbursement.
- Be prepared to defend the estate against claims that are not justified.
- File final income tax return for decedent; fiduciary returns for the estate; property and local taxes.
- File federal estate tax return and state returns as required.Prepare for any tax audits and defend the estate against improper assessments.
- Submit progress reports to beneficiaries as settlement of the estate progresses.
- Prepare a final accounting for all beneficiaries and the local Court.
- Pay cash legacies and other bequests as directed by the Will.
- Transfer funds to trusts as directed by the Will, after arranging meetings between Trustees and beneficiaries.
As you can see, naming of your Executor or Executrix is an important decision that carries great responsibility.
Kathleen Godfrey is president of Godfrey Financial Associates, Inc., an independent investment advisory firm. Visit us on-line atwww.godfreyfinancial.com.
Godfrey Financial Associates, Inc. is not a legal or tax advisor; please consult with your legal or tax professional with questions specific to your situation.