Many individuals are aware that they should create a will to protect their assets in case of their death. However, most people don’t recognize the importance of choosing an executor. An executor of a will is the person who administers to matters that have to do with the estate and assets of someone who has passed away. If you select the right executor, your assets will be distributed in a straightforward manner. Choosing the wrong executor could cause your loved ones to experience delays in getting their inheritance.
Many people simply assign their closest relative as the executor of their estate. They may not realize that the executor must possess the following qualities:
- Organizational skills
- Management expertise
- Communication skills
- Some accounting and business knowledge
- Impeccable record-keeping abilities
- The ability to adhere to deadlines
It’s not enough for the executor to show loyalty toward the deceased. The executor must have the time, ability and knowledge to take care of several aspects pertaining to the deceased’s assets and estate.
Opening the Estate
When someone dies, that person’s will goes through probate. During this time, it is reviewed for validity. If an executor was named in the will, that executor will be appointed by the court. The executor must file official paperwork stating that he or she will represent the estate.
The executor is responsible for identifying interested parties, such as creditors, and informing them about your death. Sometimes, creditors must be notified with a certified letter. Other times, the court requires the executor to publish a notice in the newspaper. Errors made during this step could result in lawsuits from creditors or beneficiaries.
During the probate period, the court will help the executor locate beneficiaries. The court will also oversee the allocation of assets.
According to U.S. Probate Services, some common mistakes made by executors are:
- Failure to educate themselves about the process
- Trying to do everything themselves
- Choosing loved ones instead of professionals to complete tasks
- Failure to provide accurate records on time
- Neglecting to communicate with beneficiaries
- Delaying the probate process
Inventory of Assets
The executor must account for all of the deceased individual’s assets. A list of all financial accounts must be created. All property owned by the deceased must be disclosed. Valuable personal items, such as heirlooms and antiques, must be inventoried. The probate court will review the list of these items.
Depending on the deceased individual’s level of organization, this task may be straightforward or convoluted. Paperwork must be reviewed, and legal records and deeds may have to be examined. Inaccurately recording the deceased person’s holdings may lead to delays in distributing them.
Administering the Estate
Before distributing the wealth, the executor must allocate funds to any debt collectors. The executor is also responsible for collecting debts that are owed to the deceased. Those funds will be added to the deceased’s assets.
The executor may also be responsible for buying or selling resources associated with the deceased’s business. At times, the executor must manage the business until it is taken over by a beneficiary. If this is the case, the executor must have some business knowledge.
Tax Management
The executor must hire a professional to calculate estate taxes, file a tax return and pay any appropriate taxes. The executor must also file the deceased’s income tax return for the previous year. Any refunds will be appropriated to the beneficiaries.
Closing the Estate and Allocating Assets
To close the estate, the executor must show the court that all outstanding bills and taxes have been paid. The executor is responsible for keeping accurate records of all the liabilities that have been settled.
The executor must then issue the assets to beneficiaries according to the requirements of the will. Although this seems like a straightforward process, the executor may have to deal with setting up trusts, managing envious family members and preventing any contests to the will.
According to Debt.org, most debts should be paid from the deceased’s estate. Friends and family members are usually not responsible for paying debts. However, the executor must be aware that equity from property or possessions must be used to pay debts before allocating assets to heirs.
Selecting the Best Executor
It is important to select a competent executor who will be able to manage all aspects of your estate. Although the executor doesn’t have to complete all of the work, he or she must have the ability to delegate tasks and hire appropriate professionals to assist with the process. Instead of choosing a friend or family member, you may benefit from hiring an attorney or another type of professional to serve as your executor.
Hiring a professional will ensure that your beneficiaries receive their inheritance in an appropriate time frame. Professionals are used to dealing with the ins and outs of probate and wills. Choosing the right executor will give you peace of mind that your family will be taken care of even when you’re not around.
To learn more please call (800) 662-0882 or visit Contact Us
