Let’s discuss the duties of an executor.
So, you have just been named as executor of an estate. You have our condolences!
That’s because you (probably) will have some work ahead of you.
In this video, Tom discusses the three primary duties of an executor. Additionally, plus Tom covers some of our most frequently asked questions when it comes to working as an an executor of an estate. Tom covers a lot of ground in this episode while talking about your responsibilities and obligations of an executor of an estate.
We cannot stress enough – serving as an executor of an estate is a serious obligation. The executor carries a fiduciary responsibility. That is a legal duty to serve in an efficient and judicious manner. If you are unable or unwilling to accept the duties of an executor, seek professional legal help! This is *not* a DIY (do-it-yourself) project.
An executor has a legal responsibility, a fiduciary obligation, to carry out the instructions of the deceased.
Timestamps for “3 Duties of an Executor”
1:02 – Collecting the assets and debts
1:15 – Paying the expenses and taxes
1:25 – Transfer the assets
2:04 – Responsibility and fiduciary obligations
2:45 – Tax returns of a decedent
3:21 – How to handle expenses
4:00 – Executor-related frequently asked questions
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Transcript for “3 Duties of an Executor”
So you’ve just been named executor of somebody’s estate. Now what?
We’re going to talk about it in this video.
Welcome to the Mullooly Asset Show, I’m your host, Tom Mullooly. This is episode 339 for those counting at home. Thanks for tuning in.
So you’ve just been named executor of somebody’s estate. Now what?
You need to understand that, as an executor, you are a fiduciary. You’ve got a legal obligation to act in the best interests of the estate and the beneficiaries. It’s important — the role that you have — as executor, and fiduciary, is to protect the assets, and make sure they are distributed properly.
There are 3 main responsibilities that an executor has to an estate.
The first is that you have to collect, inventory and appraise all of the assets – and all of the debts – that are part of someone’s estate.
The second thing you need to do is you have toi pay the bills. You have to pay the taxes and you have to pay the expenses that are left after someone passes away.
The third thing you need to do is, as executor, you have to transfer the property into the proper names of whoever is the beneficiaries of this person’s estate.
And that sounds like three simple things to do. They are not! They can take a long time
We just wrapped up an estate that has been around for twenty years. That’s an extreme! But this is not something that you open and shut in a week. A lot of times, these things hang around for a couple of months. So, sit tight, it’s not going away pretty quick.
Keep in mind that if you accept the appointment as executor, you’ve got this legal obligation. And you’re going to be held responsible to implement all of the terms, all of the details of someone’s will and their last wishes.
If you are not up-to-speed on the terms of the will, get an attorney. Please get an attorney. This is not D-I-Y, do-it-yourself stuff. So you really should have a professional looking over your shoulder and giving you some guidance when it comes to estate matters.
Another area where you are definitely going to need some help, or you should get some help, or consider getting some help, is with taxes. You, as executor, are responsible for the decedent’s last tax return.
Now, even if someone passes away, the first couple of days in January, there’s a possibility there may be some income. And therefore you may have some income taxes or an income tax return that you’ve got to file. The problem is, if someone passes away in January or February, you may not get a 1099 until January or February of the following year. These things don’t resolve themselves quickly.
What about unpaid bills? What about expenses that people have?
You’re not going to pay them out of your own pocket!
Final expenses: funeral expenses for example, any hospital bills – things like that – these are all paid out of the assets of the decedent. It’s important to keep a very good accounting of where every dollar gets spent. So this can be deducted before beneficiaries get paid out.
You always have to keep a good accounting of where the money goes.
Some other questions that we get:
“Can I get sued?” “Am I personally responsible, personally liable?”
Yes.
You are the executor and you have a fiduciary obligation.
“Can I just say hey this is getting complicated and I am really busy. I quit!”
No. You can’t.
Being discharged as an executor in most states, that is a formal process. This is not something where you can just throw up your hands and walk away.
“Do I get paid as an executor?”
Yes, you can.
Different states have different fee schedules and suggested amounts that you can use. One of the things we’ve seen a lot is family members — who often get named as executors — they will just say “oh, I don’t want to get any money for this.”
Don’t be so quick to waive that off.
You may be in a situation where things are getting really complicated. Or you may have to deal with some sticky matters regarding family members. Don’t be so quick to waive off a fee. You may be spending a lot of time as an executor!
There are lots of questions that we get asked about estates and acting as an executor. If you have questions, definitely reach out to us. We would be happy to talk you through it.
That is the message for episode 339, thanks again for tuning in.