One of the “tough” estate planning questions is who should be your executor. This decision requires consideration to multiple aspects including the duties, liabilities, and qualifications of the individual whom you select. In the next few blogs, I’ll go through the most common (and perhaps most important) questions
WHAT IS AN EXECUTOR?
When an individual passes, the executor is the one who steps in to make sure that the deceased’s creditors get paid, the estate’s tax obligations are fulfilled, and the assets of the estate get distributed in accordance with the Will. An executor is court appointed, and as such is an officer of the Court.
WHAT ARE THE DUTIES OF THE EXECUTOR?
The executor’s primary duty is to administer the estate in accordance with the law, and the Will of the deceased. In fact, the executor is required to sign and file an oath that they will faithfully discharge the duties imposed by law according to the best of their ability[1].
Properly viewed, the duties of the executor are primarily “financial” in nature as seen in the following:
- The executor is responsible for publishing Notice of the opening of the Estate, the time for Creditors to file Claims, the Rights of a Surviving Spouse, and providing heirs notice of the time in which any action to set aside a Will must be filed[2].
- The executor is responsible for preparing and filing an Inventory of all of the assets of the deceased within 9 months of the opening of the Estate[3].
- The executor is allowed to sell, mortgage, or lease property of the estate, if it is in the best interest of the beneficiaries and/or the creditors of the estate to do so.
- The executor is responsible for paying the debts of the estate[4], which include any taxes (final income taxes of the deceased, Federal Estate taxes, Inheritance Taxes, and Income taxes of the Estate)[5]. HOWEVER, these liabilities are limited to the amount of the estate itself- the executor is not personally liable for the debts of the estate unless the estate is insolvent and they have paid the debts without court approval[6].
- The executor makes a Final Report to the Court [7]which includes: an accounting of all property included in the estate, and their disbursement; a statement that all taxes have been filed and paid; as well as a statement that all debts and charges have been paid.
- The executor is responsible for distributing the assets remaining after payment of all debts and taxes to the beneficiaries, in accordance with the Will.
- Upon satisfactory proof that the estate has paid taxes, creditors, costs of administration (including fees of the executor, the Attorney for the Estate, and charges by the Court itself), AND properly distributed the remaining assets to the beneficiaries, the executor is “discharged” and relieved of any further obligation[8].
Picking (and being) an executor can be very complicated. But with the help of an attorney you trust, it can be much easier. If you have any questions for your estate planning, including who your executor should be, visit our website at www.kreamerlaw.com, or call us at 515-727-0900.
