You need to pick someone to be the “executor” of your estate, but you want to pick the right person for the job. So what exactly does an executor do?
Essentially, the executor is responsible for four things:
- identifying and protecting all of the deceased person’s assets;
- identifying people or business to whom the deceased person owed money and notifying them that the estate has been opened, and then paying (from the estate) only those debts that are proper;
- filing various tax returns, including the deceased person’s final (and any outstanding) income tax returns and any required federal or state estate or inheritance tax returns and paying (from the estate) any required taxes; and
- when all of that is done, distributing all remaining estate assets to the “beneficiaries” – those persons named in the will or, if the person died without a will, the persons entitled to the estate according to state law.
Along the way, the executor may need to file various forms with the probate court and may need to (and probably should anyway) keep beneficiaries of the estate notified. The executor also should take care of cancelling credit cards, cancelling various services and subscriptions, and generally winding down the deceased person’s affairs.
Unless the will provides otherwise, the executor is entitled to be paid for his or her services out of the assets of the estate.
Being an executor is not an easy job, so you want to pick someone who has the organizational skills, temperament, and time to do the job.
It also is not a job to be taken lightly. The executor is accountable to the beneficiaries and to the creditors of the estate and even is personally liable for taxes if the estate was distributed before taxes were paid.
