When a person passes away, they leave behind an estate made up of all their assets. Someone must manage the estate property, ensure that creditors are paid, and ensure that the assets left behind go to chosen heirs.
An executor of an estate fulfills that role. Also called personal representatives, executors are typically chosen by the deceased person or appointed by the court.
This guide explains what an executor is, the role they play after a death, how to select an executor and what happens if you don’t name one.
What Is an Executor of an Estate?
An executor is a person appointed by a deceased individual to manage the affairs of someone who has passed away.
This individual is responsible for carrying out the wishes of the deceased. The executor or personal administrator:
- Gathers all of the important documents, such as a last will and testament;
- Files any required court paperwork;
- Manages assets until they can be transferred to heirs;
- Facilitates the transfer of money and property to beneficiaries after a death.
In many cases, assets must pass through a process called probate. This is an official process in which the court oversees the distribution of assets to beneficiaries, the payment of creditors and ensures that the last will and testament created by the deceased is valid and enforceable. An executor participates in the probate process and manages assets during it.
This individual has a fiduciary duty to act in the best interests of the estate. This is the highest duty owed under the law.
Who Appoints a Personal Representative?
Typically, when someone creates a will, they name an individual whom they trust to serve as their personal representative.
When this does not occur, the court must appoint someone to manage the deceased person’s affairs. Usually, the court selects a close relative who is willing and able to take on the responsibility involved.
How Should You Choose Someone?
If you are writing your will and selecting someone to manage your estate after death, you should take this responsibility seriously. The goal is to choose someone you can count on to fulfill your wishes.
Your chosen person should be an individual whom you trust to act with the utmost honesty and integrity. It should be someone whom you feel can effectively manage your property, potentially for months, until it is transferred to new owners.
And it should be an individual whom you believe is capable of submitting and completing paperwork to the court, the IRS and other government agencies.
Can a Beneficiary Serve in This Role?
Beneficiaries can and often do serve as executors. A beneficiary is someone that a deceased person leaves money to in their will. Since many people choose a spouse or an adult child to act as their personal representative and manage their estate after death, it is very likely that this individual will also be a beneficiary.
What Is the Role of an Executor of an Estate?
A personal representative has many important obligations after a death. Some of the responsibilities include:
- Obtaining a copy of the last will and testament and other necessary paperwork such as a death certificate.
- Identifying and inventorying all of the assets of the deceased individual. This process also involves determining which assets pass via the probate process versus which assets pass outside of probate.
- Managing the assets of the deceased, such as by paying a mortgage payment for the deceased’s home out of the estate’s bank account.
- Submitting the will to be probated in the relevant court by the deadline (which can vary by state). If the deceased owned property in multiple locations, the probate process may need to be completed in multiple states.
- Notifying the parties who may have a claim against the estate, including beneficiaries, potential heirs and creditors
- Overseeing and managing the probate process, which could include proving a will is valid and managing assets during court proceedings
- Paying the debts of the deceased out of the estate
- Facilitating the transfer of assets to beneficiaries
- Filing any required paperwork with the IRS or other regulatory authorities
Sometimes, carrying out this job requires bringing in other professionals, such as accountants, investment professionals or attorneys to offer assistance with complex issues such as locating and valuing assets or filing court documents.
It is often a good idea for someone serving in this role to hire an estate planning attorney. A lawyer can explain their own rights and obligations and help them in ensuring that the wishes of the deceased are carried out as efficiently and cost-effectively as possible.
Frequently Asked Question (FAQ's)
What are the main duties of an executor?
Someone who has been appointed to fulfill this role has the responsibility of managing the assets of the deceased and ensuring that assets are transferred appropriately to beneficiaries. Also called personal representatives, they will file paperwork to get the probate process started, facilitate notice to beneficiaries and creditors, manage money and property left behind and help to facilitate the transfer of assets to those entitled to receive them after a death.
Can an executor be a beneficiary?
When a person names a personal representative to oversee their estate, this individual is often a beneficiary in the will as well. In fact, it is common for a spouse or an adult child to serve as the executor and also to inherit money or property. Regardless of whether they inherit, the appointed personal representative must act in the best interests of the estate and carry out the instructions in the will.
Why is it important to name a personal representative?
If you do not name someone to manage your estate when you create a will, the court will appoint someone for you. That individual could be someone whom you would not have chosen, who is not as well equipped to carry out your wishes or who can’t effectively manage your assets until they are transferred to your chosen beneficiaries.
