What is the Role of an Executor in Estate Planning?
The estate planning process can sometimes seem a little overwhelming at first with all of the legalese and fancy words we are not used to hearing. When putting together a will, you will need to choose and name an executor.
Simply put, an executor is the person you choose to handle and settle your estate when you pass away. They are responsible for making sure all outstanding debts are paid and that your assets are distributed according to your wishes.
If you die without a will, the probate court will assign an executor (sometimes also called an administrator or personal representative) to distribute your assets according to state law.
Executors/administrators are expected to act in good faith in their duties and act on behalf of the interests of beneficiaries and creditors, also known as ‘fiduciary duty’. If an executor fails to perform his or her fiduciary duties, she or he may face a civil lawsuit.
What an Executor is Responsible For
- Locating the beneficiaries named in the will
- Giving notice to creditors of decedent’s death and paying all outstanding debts
- Identifying, protecting and managed the decedent’s assets
- Preparing and filing tax returns
- Accounting for all assets of the estate and any payments made
- Distributing the assets according to the terms of the will and state law
What an Executor Cannot Do
- Do anything to carry out the will before you pass away
- Sign an unsigned will on behalf of the deceased
- Take any action managing the estate before the court has appointed them as executor (even if named in your will)
- Sell assets for less than fair market value without agreement of the beneficiaries
- Change any provisions of a will
- Prevent heirs from contesting the will
Best Ways to Prepare Your Executor for their Duties
- Let him/her know where all important documents are kept
- Go over the will so they can ask any clarifying questions
- Introduce them to your attorney, CPA, financial advisor, and any trustees so they know who they will be working with after you pass