What Is an Executor of Estate? A Legal Guide

An executor of the estate, someone with official authority to handle all legal and financial matters, like paying estate taxes and distributing assets, helps ensure your wishes are fulfilled and that your estate is in safe hands. 

 

Understand what an estate executor can and cannot do and how to pick the best person for this responsibility. 

Executor of estate highlights

Let’s take a closer look at what an executor of an estate, also known as an “executor of will” or “personal representative,” is. 

• Definition. An executor is the individual appointed by the probate court to manage the estate's affairs as per the wishes of the deceased. An executor must be above 18.
• Primary duties. Their fiduciary duty is to act in the best interest of the deceased, their estate, and the listed beneficiaries. If they sway from their duties or put personal interests before the estate, they will be answerable to the probate court and could be personally liable for any mismanaged funds. 
• Legal appointment. An executor can be appointed by the deceased person in their will. It’s common for a testator (person writing the will) to appoint someone they trust, such as a surviving spouse, parent, or adult child as their executor of estate. 

What are the duties of an executor of estate? 

The duties of an estate executor involve handling the deceased’s personal property until it’s officially passed on to the beneficiaries. While the exact duties vary by state law and the nature of the estate (a larger, complex estate may need more work), here is a breakdown of what you can be expected to do. 

Locate and learn the will

An executor of estate's top priority is to locate and study with the will—understand how the deceased person wants their assets and belongings managed. Pay attention to details like whether they named a guardian for minor children or if they specified any funeral requests. 

If you don’t have a copy of the will, you can request one from the estate attorney or family members. 

If the deceased died intestate (without a signed will), the court will follow the state’s intestate succession process and appoint an estate administrator. 

File will with the probate court

Settlement of the estate's assets starts by informing the courts about the existence of a will and getting court approval. For this, you will need to file the will and death certificate with the probate court. The court will review the authenticity of the documents, and if you’re deemed fit to serve your duties, the court will hand you a letter of testamentary.

Without the letter of testamentary, you will be unable to access the probate assets and settle the deceased's affairs. For example, financial institutions can block you from removing money from bank accounts to pay bills.

Each state has a different deadline for filing the will with the courts. If you don’t file on time, you may lose your right to serve as executor. 

Notify appropriate parties 

The will's executor is legally obligated to alert all relevant parties about the deceased’s death and the initiation of the probate process. This includes heirs, beneficiaries, creditors, banks, employers, and landlords (if any). You must also inform government agencies like the Social Security Administration, Internal Revenue Service (IRS), and the Department of Motor Vehicles (DMV) about the testator’s death. 

Assess and secure the estate’s assets 

The executor of estate must meticulously take stock of the estate's assets and determine their fair market value using either the date of death value or an alternative valuation date, as provided in the Internal Revenue Code (IRC). 

Keep a detailed estate inventory of all assets, including real estate and vehicles, bank accounts, investments, digital assets, and personal belongings. This is crucial for proper estate management. 

Manage estate finances

Managing estate finances includes collecting any debts owed to the estate, recovering any unpaid salary and other employee benefits, and filing for Social Security or any life insurance benefits.

This part of the executor's duties also involves wrapping up any miscellaneous affairs like canceling credit cards, closing bank accounts, and overseeing maintenance and upkeep of the property so it doesn’t lose value. 

Many executors open an estate bank account to help with clean bookkeeping and paying debts and bills associated with the estate.

Pay estate taxes and debts

The executor is responsible for paying applicable federal and state taxes for the deceased and the estate. Any income earned by the estate during the administration must be reported in the estate's income tax returns. 

All outstanding debts, including valid claims from creditors, must be prioritized and settled. All of the money to settle the estate's debts must come out of the deceased's assets. In cases of insufficient assets, the executor may have to run an estate sale to gain funds.

Distribute assets 

After all money matters are settled, the executor will distribute the remaining assets to the named beneficiaries. This step could involve accessing bank and investment accounts, distributing balances, or transferring property deeds. 

Keep records

All documents related to the estate, including titles, how assets were distributed, and which repair expenses were incurred, must be documented and stored in a safe place. This will help with the final accounting and closing of the estate. 

Close the estate

After all debts, taxes, and assets are settled, the executor can petition the court to formally close the probate case and relieve them of their duties. 

Qualities to look for in an estate executor 

An estate executor holds a heavy-duty job with lots of responsibility. You don’t want such authority and power to fall into the wrong hands. Experts recommend you seek these traits in an estate executor: 

• Trustworthiness. If you don’t trust the person, find someone else. They are managing your legacy, and trust is non-negotiable. 
• Organizational skills. There’s a lot of fine-print paperwork, deadlines, and court hearings involved. You want someone who knows what is due and how to avoid fines and other financial repercussions. 
• Bandwidth. The role of an executor is a significant time investment. There might be extensive legal battles between beneficiaries that the executor has to handle. Pick one who has the time and capacity to handle your affairs. 
• Financial experience. Money is a slippery subject, and you want a person with financial wisdom to judge properly when to sell or buy assets and protect the estate’s value.
• Communication skills. The job involves interacting with many people, including attorneys, court representatives, and beneficiaries. Get someone with strong people skills to avoid other problems. 
• Patience. Resolving estate matters can take a long time, especially if there are issues like contention of a will or litigation. Patience allows the person to remain respectful and resolve matters with a calm head.  
• Dedication. Unexpected challenges can stagnate or delay the process. Dedication will allow the person to preserve and sort through the potential challenges and present a solution. 

How to choose an executor of estate

Choosing an executor is one of the most important decisions in estate planning. It’s natural to lean towards family members or someone you love, but keep the primary duties of an executor in mind as you make your decision. It’s wiser to make this call by your head and not just your heart. 

• Select a candidate. Come up with a potential list of two or three candidates who possess the required traits and can handle the magnitude of the job. Remember, you can include professionals like a probate lawyer or bank official in your top choices. This is beneficial if you have complex estate assets or a blended family structure. 
• Discuss the selection with them. Reach out to your choices, discuss the role with them, and explain the time commitment. Ask them if they are willing to perform the duty. Sometimes, the selected candidate may decline because they are too far away or don’t feel they have the time and energy to fulfill the role. 
• Consult an estate planning attorney. While it’s not a requirement, having someone with legal experience makes estate planning and probate smoother and more efficient. There are fewer chances of oversight and mistakes when you have a professional handling your affairs. 
• Update your will. Once the executor has accepted their nomination, update your will with their name, address, and contact information. You can also name a backup executor in your will if the top choice is unable or unwilling to perform their duties later on. 

The official appointment process

Even if you’re appointed executor of a will, the court must approve the nomination. The official process of gaining legal power as an executor after the decedent dies is as follows:

• File the will and death certificate with the probate court to open the probate process. 
• Attend the court hearing to get court approval. A judge will review the paperwork and assess your capability to serve. If you pass the test, they will officially appoint you as executor of estate. 
• Receive a letter of testamentary as your official appointment letter. You can begin your executor duties now. 

In scenarios where the last will and testament doesn’t specify an executor or the named executor is either unwilling or deemed unfit to perform the role, the court will appoint an estate administrator, typically a close family member or neutral third party. 

What to do if you are chosen as an estate executor

Being named an executor is no small feat. It’s a difficult job, and it shows someone’s high regard and trust in you and your capabilities. 

Your job as an executor of an estate doesn’t begin until the decedent's death. If they are alive and have informed you of your appointment as their personal representative, it couldn’t hurt to have a quick conversation with them about your estate administration duties. It will allow you to study their will. It’s okay to ask questions along the lines of “Where are the other estate planning documents?” and “Who is the point of contact at this financial institution?” Being proactive about your role will give you the confidence to handle your duties. 

Common challenges and disputes

An executor's job isn’t straightforward. Common challenges they face include: 

• Balancing family dynamics
• Locating assets
• Managing disagreements over asset evaluation
• Dealing with aggressive creditors

For instance, John is the executor of his grandfather’s estate, and the intended beneficiaries disagree with his evaluation of his grandfather’s farmhouse. This is a tense situation that can quickly spiral out of hand if the executor is not equipped or confident to handle matters. 

Here are some tips to resolve matters when the going gets tough: 

• Establish clear communication protocols and boundaries that will help avoid misunderstanding and create open communication channels. 
• Document all paperwork and transactions to ensure transparency. 
• Call in mediators to ensure conversations remain productive and respectful. 
• Seek professional help from a tax professional or estate attorney to minimize legal issues and tax liabilities. 

FAQs

Can I refuse a position as executor of an estate?

If you don’t want to accept the responsibility as executor of the estate, you don’t have to. If the willmaker is alive and has approached you before writing their will, you can kindly thank them for their consideration and decline to serve. 

Suppose you are named as an executor without being consulted and don’t wish to be legally appointed due to personal reasons or lack of time. In that case, you may need to file a written renunciation application with the probate court. 

Are executors of the estate paid?

They certainly are. Estate administrators are paid from the estate, but the amount is based on the state of residency, presence of a will, and estate size. Some states have guidelines around reasonable compensation. For instance, in California, the executor's fee is tied to the estate’s evaluation. If you have been named executor through a last will, the will may provide guidance about compensation. 

Can an estate executor resign?

Yes and no. If you have started performing your duties as an executor, you will have to submit a petition to the court to remove yourself from your responsibilities. Along with the petition, you must provide a detailed account of all financial transactions completed. 

If you wish to resign before your official appointment as executor, you need to file a Renunciation of executorship form with the state court.  

Can an executor also be a beneficiary? 

Yes, and this is quite common in cases where the testator wants to keep matters within the family rather than getting legal expertise. However, this scenario can get ugly quickly if there are disputes between beneficiaries about how the executor manages the estate. 

Can an executor override a beneficiary? 

Yes, they can, as long as they act in the estate's best interest. If the executor has acted reasonably and a beneficiary challenges their call, the court will usually side with the executor.