What Is Involved with Serving as an Executor?
Serving as the executor of a relative’s estate may seem like an honor, but it can also be a lot of work, says The (Fostoria, OH) Review Times’ recent article entitled “An executor’s guide to settling a loved one’s estate.”
As an executor of a will, you’re tasked with settling her affairs after she dies. This may sound rather easy, but you should be aware that the job can be time consuming and difficult, depending on the complexity of the decedent’s financial and family situation. Here are some of the required duties:
- Filing court papers to initiate the probate process
- Taking inventory of the decedent’s estate
- Using the decedent’s estate funds to pay bills, taxes, and funeral costs
- Taking care of canceling her credit cards and informing banks and government offices like Social Security and the post office of her death
- Readying and filing her final income tax returns; and
- Distributing assets to the beneficiaries named in the decedent’s will.
Every state has specific laws and deadlines for an executor’s responsibilities. To help you, work with an experienced estate planning attorney and take note of these reminders:
Get organized. Make certain that the decedent has an updated will and locate all her important documents and financial information. Quickly having access to her deeds, brokerage statements and insurance policies after she dies, will save you a lot of time and effort. With a complex estate, you may want to hire an experienced estate planning attorney to help you through the process. The estate will pay that expense.
Avoid conflicts. Investigate to see if there are any conflicts between the beneficiaries of the decedent’s estate. If there are some potential issues, you can make your job as executor much easier, if everyone knows in advance who’s getting what, and the decedent’s rationale for making those decisions. Ask your aunt to tell her beneficiaries what they can expect, even with her personal items because last wills often leave it up to the executor to distribute heirlooms. If there’s no distribution plan for personal property, she should write one.
Executor fees. You’re entitled to an executor’s fees paid by the estate. In most states, executors are allowed to take a percentage of the estate’s value, which can be from 1-5%, depending on the size of the estate. In Massachusetts, there is no statutory fee; a Personal Representative (the term for executor under Massachusetts law) is allowed a reasonable fee. However, if you’re a beneficiary, it may make sense for you to forgo the fee. Not only can it cause rancor among the other beneficiaries, which are likely close relatives, but also because the fee is taxable income reported on your federal and state annual tax return.
Reference: The (Fostoria, OH) Review Times (Aug. 19, 2020) “An executor’s guide to settling a loved one’s estate”