If you are asked to help a friend or family member by serving as an executor of an estate, do you understand what the role requires? Being asked to be an executor might be considered either a special honor or a personal obligation, but many significant responsibilities are also involved that you need to consider before accepting this role.
In a nutshell, an executor (referred to as a "personal representative" in some states) administers the remaining assets of the deceased person. Responsibilities of the executor may include: Identifying, taking custody of and selling assets; locating the will and trusts for asset distributions; filing tax returns; making investment decisions; arranging probate process; handling creditors' claims; and paying the expenses of the estate.
Unless you are an experienced executor, you are not expected to have the knowledge to personally handle all of the responsibilities. You do have the discretion of hiring a CPA, attorney, investment advisor or other qualified professionals to assist you with handling the estate. However, be aware that as an executor you may be held personally liable to any estate beneficiaries or creditors for certain mistakes, errors or problems in handling the estate. For example, distributing assets before creditors are properly paid, failing to file the tax returns or allowing insurance policies to lapse may create personal liability.
You may be compensated for your time and hard work. However, there may also be significant time needed to perform many of these duties. You should notify the post office, utility companies, credit card companies, banks and other beneficiaries. You should identify any benefits due to be collected from the Social Security Administration, insurance policies and final wages. You should also compile an inventory of the estate assets and determine if there could be a need for appraisals and valuations of the estate assets. Depending on the state law, there may be a fixed payment schedule or the state will allow for "reasonable compensation." This will depend on the size and complexity of the estate and the amount of time you devote to the tasks. In many cases, co-executors are a better option for large estates, especially if you need the expertise of an institutional executor.
If you accept the role and begin to fulfill your duties, you need to gather a lot of estate information. You should plan to communicate with family and to maintain a complete accounting to make sure that all of the obligations of the estate have been satisfied.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.