Have you been named as an estate executor? If so, you may be wondering what your duties and responsibilities will be. There are two different ways to become an estate executor. The first way to become an executor is for a decedent, or the person who died, to have appointed you in his or her will.
When the deceased person did not leave a will, the court can still appoint you to become the executor of the estate during the probate process. Keep in mind that you have the right to decline the position of an executor if you feel like you are unable to keep up with the duties. You will be responsible for the following duties as an estate executor.
The overall job of an estate executor is to execute the will of a deceased individual. The probate court will supervise the distribution of the assets during the probate process. Executors need to follow the instructions set forth in the will, primarily when it comes to distributing assets to named beneficiaries.
1) Working with the Court During the Probate Process
As the estate executor, you will need to keep track of the finances of the estate of the deceased person. The first job of an estate executor is to marshal all of the assets of the estate. Your job is to protect the estate’s assets against theft or mismanagement. Executors need to retitle the assets so they can control the assets. You also have a duty to make sure that any cash assets are placed in interest-bearing accounts. That way, the estate can earn interest on the cash while the probate is pending.
When real property is involved, you have a duty to make sure that real property is secure. Typically, estate executors take out insurance on the property to protect against any potential losses. If someone is living in the property without paying rent, you may need to initiate removal proceedings. Sometimes family members are living on the property but they are not paying the fair market rental value. In this instance, you need to increase the rent.
When estates own risky assets, such as financial investments or highly risky stocks, you may need to liquidate those assets so that the estate suffers no further loss. You need to act prudently with your estate assets. Take the time to secure the assets, and protect them for distribution later to the estate beneficiaries.
2) Appraising Assets and Taking an Inventory
Every estate is unique. Some estates are relatively simple and include a home, cash assets in a bank account, and a few retirement accounts. Other estates are large and complex. Taking an inventory of a large and complex house can cost a significant amount of money and be incredibly time-consuming. After you have taken an inventory of all of the property owned by the estate, you will need to set up an appraisal.
The probate court will give you notice of which appraiser you need to use to value every asset of the estate. Once the appraisal is complete, you will need to submit the appraisal and assets to the court and serve the notice on all interested parties. Interested parties usually include anyone who has a claim to the estate or all of the heirs at law.
3) Notify Creditors
Next, you will need to notify any creditors to whom the estate owned money. You will need to notify any known and potential creditor of the deceased individual also called the decedent. After you send a notice to the creditors, they will have only 60 days to file a claim to recover the money with the estate. When a creditor fails to meet that deadline, it is barred from collecting the debt from that point forward.
The sooner you notify the creditors, the better. You will be able to pay the claims of creditors who respond to the notice. Or, you may need to challenge some of the claims made by creditors because they do not involve legally enforceable debts. Dealing with creditors of the estate is an incredibly important step. You will not be able to distribute the assets of the estate to beneficiaries until the claims of the creditors are resolved.
4) Getting the Estate Ready for Distribution
After you have dealt with creditor claims, you can begin preparing for the distribution of the assets to the beneficiaries. Selling assets, especially real estate, takes time. Executors need to determine if the sale of an asset is required as quickly as possible. There are several different procedures for selling property from an estate, depending on whether you have independent powers under the Independent Administration of Estates Act. At the Law Office of Daniel Hunt, we can help you determine how to go about selling assets from the estate.
5) Keep a Detailed and Accurate Accounting Log
As soon as you accept the position of estate executor, you will need to keep a close record of all of your accounts. Courts will require you to provide a detailed account before you will be allowed to sell off the assets and close the estate. Many estate executors hire professional accountants to help them keep a record of accounts. Any spending that you cannot prove as a valid estate expense can be charged against you personally.
6) Close the Estate and Distribute Your Assets
When all of the work regarding the estate is done, you will need to file a final report and petition with the court seeking to make final distributions. You will need to contact your attorneys, any other professionals who helped with the process, as well as your attorneys. The court will need to approve of your accounting, as well.
7) Hire an Experienced Lawyer
At the Law Office of Daniel Hunt, we help estate executors by representing them throughout the process. If you have been appointed as an estate executor, we can make sure you are legally protected. Contact us today to schedule your initial consultation.