The Role of the Estate’s Executor

By Matt DeLine

After a loved one’s death, his or her the earthly possessions and accumulated debts survive, creating what is known as the decedent’s estate.  In most testamentary documents, whether a living trust or a simple will, an executor is named to manage this estate, essentially standing in the shoes of the decedent to wind down financial matters so that all creditors are satisfied, and any remainder is distributed to the estate’s beneficiaries. 

This task is both an honor and a burden.  Whether the assets and liabilities are significant or relatively simple, the responsibility remains equally important.  Though the law does not require an executor to be a legal or financial expert, he or she is held to a higher standard of care when managing an estate.  The executor is a “fiduciary” of the estate and must treat the assets and liabilities with the utmost honesty, impartiality and diligence.  In this sense, the estate is not unlike a corporation, with the executor as its Chief Financial Officer, duty-bound to protect and manage assets and debts for the benefit of all shareholders. 

Generally speaking, the executor is responsible for identifying all available assets and all existing debts, then creating a plan for complete dissolution of the estate with distribution to surviving beneficiaries.  However, the following specific tasks typically are required by law.

  1. Identification and Management of Assets

    Though the blueprint for distribution of an estate may be presented in a trust or will, the mechanics are typically not.  An executor must inventory and value all existing assets, and then manage them until the affairs of the estate are settled.  Assets include checking accounts, securities, vehicles and personal possessions, all of which requiring relatively little management effort.  However, if a residence is left behind, the executor is charged with the fiduciary responsibility of managing that asset to obtain the best possible value for the benefit of the estate.  This requires not only payment of any existing mortgage, but also maintenance and preservation of the home in a saleable condition.  Relying on legal counsel is urged when an estate includes significant assets.  But, when a home is involved, equally important is the retention of a qualified probate estate real estate agent who is well familiar with the technical requirements of probate real estate. 

  2. Creation of the Probate Estate

    If the loved one has left no will, known as “intestate succession,” a state’s laws will be applied to determine the heirs.  If a will has been created, it must be filed with the Probate Court, which will at that time recognize the existence of the estate and empower the executor to transact the business of dissolving and distributing the estate to the named beneficiaries. 

  3. Immediate Termination of Obligations and Notification of Third Parties

    The executor is mandated with the responsibility of terminating any continuing obligations, including terminating leases and credit cards.  The executor must also notify government agencies of the decedent’s death, including the Social Security Administration, the United States Post Office, Medicare, and the Department of Veterans Affairs. 

  4. Opening of an Estate Bank Account

    Because all transactions regarding the estate require an accounting, a bank account should be opened to accept funds and ultimately distribute them to the beneficiaries.  Paychecks, debt repayment or stock dividends are deposited, as are any proceeds from sale of estate assets.  From this pool of funds, continuing obligations such as a mortgage, utilities and homeowners’ insurance premiums must be paid.

  5. Payment of Debts

    Along with a complete inventory of assets, the executor is also required to list all outstanding debts.  Each creditor must also be notified of the existence of the probate estate, and those creditors may file a claim against the estate to ensure payment. 

  6. Payment of Taxes

    The executor is responsible for filing a final income tax return from the beginning of the tax year to the date of a loved one’s death.  State and federal estate tax returns are also required for larger estates. 

  7. Supervision of Distribution 

    After all financial obligations are met, any remaining funds – including proceeds from the sale of a home are distributed to named beneficiaries.  Upon final distribution, the executor may request an order from the court to close the probate estate, thereby ending the executor’s considerable responsibilities. 

         I hope this article has been informative and helpful. I would be honored to assist your family. Every situation is special, so our team is available to discuss your needs in a preliminary telephone conference.  Based on the information gathered, we research and analyze your circumstances and needs in preparation for a personal meeting with family members.  We discuss all options and answer all of your questions, then set out to execute our strategy to meet all your needs.  

Call me to see how we can help.

Matt DeLine, CPRES and CPE

619-736-0234 / /

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