What Does an Estate Executor Do?
Although people often see death as morbid, the reality is that death is the yin to the yang of life. In planning for death, it is advantageous to select an estate executor. This person is responsible for handling your property, debts and other unsettled issues following your passing.
In general, estate executors look to carry out any unfinished business the deceased might have had. They determine the property and debts the deceased had and figure out how to distribute them. Throughout the executor’s role, he or she is supposed to act in the best interest of the deceased, checking that others are carrying out the deceased’s wishes as the current probate and property laws permit.
Investigating the Will
One of the first things an estate executor does following a death is to examine the deceased’s will, if in fact the deceased left one. The executor enters the will into probate and tries to locate any assets or property identified in the document. He also may need to attend court hearings if the will is contested. If the will indicates specifics about trusts, burial, cremation or similar items, the executor acts as the deceased’s representative to carry out what the person who passed away wanted.
The executor has a legal obligation to contact anyone who might be involved in settling the estate. Sometimes this is not easy, as people change names or move. In addition to getting in touch with any heirs or beneficiaries, the executor of the estate also informs any creditors and lenders of the death. This contact allows the heirs, beneficiaries, creditors and lenders to make claims against the estate.
Identifying Property, Assets and Debts
The job of the estate executor is largely to transfer ownership of the deceased’s property. To do this, the executor has to figure out the value of the estate, minus any outstanding debts. The executor may go to the deceased’s home to make a formal inventory list, talk with family members and look through the deceased’s files and accounts.
Distributing Property, Assets and Debts
Once the estate executor knows exactly what the estate contains and what debts the deceased had, the executor distributes the estate property and assets. The executor has to follow the order of distribution prescribed by local probate law during this process. For example, one of the first debts an executor usually pays is the cost of burial or cremation. Taxes owed also are a priority in most jurisdictions.
Correspondence and Dispute Settlement
As the representative of the deceased, the estate executor sometimes has to answer questions about the estate others pose. He may correspond with individuals who have an interest in the estate by phone, fax, email or postal mail. Occasionally, disputes arise. Although the executor cannot render a final verdict on these disputes (this is up to the court), he can explain his position to the parties involved and present evidence supporting his initial decisions in an effort to keep disputes from turning into legal battles.
People often name a significant other or spouse as their estate executors because these individuals are already familiar with the estate. It is a good idea to name an alternate executor, however, because significant others and spouses sometimes are too distraught following a death to concentrate on estate issues. Regardless of who a person selects as the estate executor, the executor should be someone the estate owner trusts and who has the intellectual capacity to make his or her way through complex issues that can arise.
Estate executors have a fiduciary duty to the deceased, so they are not supposed to take money or other property from the estate purely for their own benefit. For example, an executor cannot take the deceased’s car just because the executor likes it. Due to the enormous responsibility being an estate executor entails, however, executors legally can be compensated for their work. The standard payment is roughly 3 percent of the value of the estate, but an individual can make provisions in his will to ensure the executor receives more if desired. In either case, the court can review the payment to check that it is reasonable given the work done.