Your parents are updating their wills and possibly their trust documents, and they ask you a huge question: “Will you be the executor of our estate?” You may be honored and flattered that they trust you enough to give you that responsibility, but you may also be petrified because you do not know what it entails, and it sounds like it could be too much responsibility.

What Does an Executor Do?

The primary role of an executor is to watch over a deceased person’s assets while appropriate payments are made to settle the estate, including handling unpaid debts and taxes. Then, after paying all amounts owed, an executor makes sure that assets are distributed to the appropriate beneficiaries.

As an executor you do not need to have legal or financial expertise, but you do have a “fiduciary duty.” This means you are committing to carry out your responsibilities with honesty, fairness, and diligence on behalf of the deceased party. Typical tasks for an executor include the following:

  • Locating estate planning documents, including the will and trust documents, and obtaining multiple copies of the death certificate. Each of the financial institutions that you will be communicating with will require the death certificate (among other documentation) to allow you to access the funds and/or close out the account.

  • Determining if the will needs to be filed in probate court. This decision can depend on state laws and the value of the property that will pass via the terms of the will. Generally, any assets with a beneficiary designation will pass to the heir(s) directly (irrespective of the terms of the will) and do not require probate proceedings. Additionally, if spouses own assets such as a home as joint tenants with rights of survivorship (JTWROS) or tenants by the entirety, then the surviving spouse would inherit the deceased’s ownership in the assets without probate.

  • Identifying each asset owned by the deceased person. As executor, you will be responsible for managing the assets until they are distributed. This may involve deciding whether an asset should be sold or retained.

  • Determining who will inherit all or part of each asset and contacting each person. If no beneficiaries have been designated or if the person died without a will, state intestacy laws dictate who will receive the assets. Many states’ laws are designed to distribute a deceased person’s assets to close relatives such as a surviving spouse, children or grandchildren, parents or siblings.

  • Notifying appropriate institutions, such as credit card companies, banks and the Social Security Administration, of the death.

  • Setting up a bank account for the estate to hold income received after death and pay debts and expenses. The bank may retitle the deceased’s checking account to the estate for this purpose. Use estate funds to pay ongoing expenses and debts.

  • Making sure that a final federal and state income tax return is prepared and filed for the year of death. If the deceased has a large taxable estate, you may also have to file state and federal estate tax returns within nine months of the date of death.

  • Ensuing that all property is distributed properly according to the beneficiary designation forms or stipulations of the will or trust document.

As you go through each step, consult with legal or tax professionals as appropriate.

The time it will take to address all the items mentioned will vary depending on the complexity of the situation. The average estate administration can take many hours and take up to a year or more, so be aware of what you’re committing to before you accept the responsibility.

Modera Wealth Management., LLC is an SEC registered investment adviser with places of business in Massachusetts, New Jersey, Georgia, North Carolina and Florida. SEC registration does not imply any level of skill or training. Modera may only transact business in those states in which it is registered or qualifies for an exemption or exclusion from registration requirements.

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