What does an executor of a will do?

Who can serve

The person who writes the will chooses the executor, often a spouse, adult child, trusted friend, lawyer or bank. Most states require an executor to be an adult of sound mind, and some bar people with felony convictions. Many states allow an out-of-state executor but may require a bond or a local agent. Being named is not an obligation: a person can decline, and the court will appoint the backup executor or another suitable person. When there is no will, the court appoints an administrator, usually a close relative, who does the same job.

Getting appointed

The executor files the original will and a petition with the probate court. After the court approves, it issues letters testamentary (or letters of administration), which prove the executor's authority to banks, brokers and government agencies. Some wills waive the requirement to post a bond; otherwise the executor may need to buy one to protect the estate.

The executor's main duties

1. Secure the property — lock the home, keep insurance in force, protect vehicles and valuables, forward mail.
2. Notify — beneficiaries and heirs, the Social Security Administration, banks, pension plans and other institutions, and creditors, including publishing a notice to creditors where required.
3. Inventory and value assets — list everything the estate owns, with values as of the date of death, often using appraisers. Many courts require the inventory to be filed.
4. Manage the estate — open an estate bank account with an employer identification number from the IRS, collect income, pay ongoing bills, and manage investments prudently.
5. Pay valid debts and expenses — funeral costs, administration expenses, taxes and creditors' claims, in the order of priority set by state law. The executor can and should reject invalid claims.
6. File tax returns — the deceased person's final income tax return, estate income tax returns (Form 1041), and a federal or state estate tax return if required.
7. Distribute property — according to the will, after debts and taxes are paid, often obtaining receipts or releases from beneficiaries.
8. Account and close — give a final accounting to the court or beneficiaries and ask to be discharged.

Fiduciary duties

An executor must act honestly, in good faith and in the best interests of the estate and beneficiaries. That means no mixing estate money with personal funds, no self-dealing such as buying estate property cheaply, treating beneficiaries impartially, keeping accurate records and acting with reasonable care. An executor who breaches these duties can be removed by the court and held personally liable for losses.

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Personal liability for debts?

Generally no. An executor pays the deceased person's debts from the estate, not from personal funds. But an executor who distributes assets to beneficiaries before paying valid debts or taxes can become personally liable for what should have been paid, including federal taxes.

Payment

Executors are entitled to reasonable compensation, set by the will, by state statute (California, for example, uses a percentage schedule) or by the court. Family members often waive the fee, especially if they are also beneficiaries, because fees are taxable income while inheritances generally are not. Executors can also be reimbursed for expenses and can hire lawyers, accountants and appraisers paid from the estate.

How long the role lasts

Usually six months to two years, depending on the estate's size and complexity, the state's creditor period and whether there are disputes.

Tips for new executors

• Do not distribute anything until debts and taxes are clear.
• Keep every receipt and write down every decision.
• Communicate with beneficiaries regularly — silence breeds suspicion.
• Consult a probate lawyer early, especially if there is real estate, a business, debts, or family conflict.

Co-executors and resigning

A will may name two or more co-executors, who usually must act together — which can slow things down if they disagree. An executor who finds the job too burdensome can resign with the court's permission after accounting for what they have done, and the court will appoint a successor.