If someone has asked you to be the executor of their estate, or if you are thinking about who to name as yours, this post is for you. Being an executor is one of the most important roles in estate planning, and it comes with real responsibilities that most people do not fully understand until they are in the middle of it.
What an Executor Actually Does
An executor (sometimes called a personal representative) is the person named in a will to carry out the deceased person's wishes and manage the legal process of settling their estate. This is not a ceremonial role. It is a working one.
Filing the will with the probate court. In most states, the executor is responsible for submitting the will to the court and initiating the probate process. This is how the will becomes legally recognized.
Notifying beneficiaries and creditors. The executor must notify the people named in the will that they are beneficiaries, and must also notify creditors that the person has passed away so that debts can be settled.
Inventorying and appraising assets. The executor is responsible for identifying and documenting all of the deceased person's assets, including bank accounts, investment accounts, real estate, vehicles, and personal property.
Paying debts and taxes. Before any assets can be distributed to beneficiaries, the executor must pay any outstanding debts, final bills, and taxes owed by the estate.
Distributing assets to beneficiaries. Once debts and taxes are settled, the executor distributes the remaining assets according to the instructions in the will.
Filing final tax returns. The executor is responsible for filing the deceased person's final income tax return and, if necessary, an estate tax return.
The Liabilities You Should Know About
Here is the part that surprises most people: executors can be held personally liable if they make mistakes. If an executor distributes assets to beneficiaries before paying debts and taxes, for example, they may be personally responsible for covering those obligations.
This is why it is important to take the role seriously, work with an attorney when needed, and not rush the process.
Before You Say Yes (or Name Someone)
If you are being asked to serve as an executor, ask yourself a few honest questions. Do you have the time to manage this process, which can take months or even years? Are you organized and detail oriented? Are you comfortable dealing with financial and legal paperwork? Are you able to remain neutral if family members disagree?
If you are naming an executor in your own will, choose someone who is trustworthy, organized, and ideally lives nearby. You can also name a professional executor, like an attorney or a bank trust department, if you do not have a suitable person in your life.
The Bottom Line
Being an executor is an act of love and service, but it is also a significant responsibility. Understanding what the role involves before you agree to it, or before you name someone to do it, is one of the most important things you can do for your family. Make sure the person you choose is prepared. And if that person is you, now you know what you are signing up for.