The Roles and Responsibilities of an Executor

Many of us will face the prospect of handling the affairs of a loved one after they pass. The role of an executor is crucial in many circumstances, carrying out the wishes of the deceased. It’s important to understand the responsibilities of an executor and what is entailed in case you ever serve in this capacity. Provided below are several key points about how to handle the financial affairs of the deceased in an orderly fashion.

The Roles and Responsibilities of an Executor

An executor of the estate is going to be responsible for the distribution of assets, paying any taxes that may be due, and filing all of this with the court. As an executor, you will be held to a fiduciary standard. That means that you will be required to make decisions in the best interest of the deceased, the family, and the beneficiaries when managing the estate.

Consider Hiring a Professional

If you feel that you don’t have that kind of qualification and manage someone’s estate correctly, consider hiring a professional that can assist you. Whether it’s an accountant, a financial professional, an attorney, or a combination of the three, you may wind up needing someone depended upon the complexity of the estate.

Those First Steps as the Executor

Right out of the gate, there will be things that you will need to handle to start the process correctly. One of the first is to file the Will with the court and obtain the death certificates. You will want to create an asset list, an inventory so to speak, of all the deceased’s assets and the amounts. You will have to notify every financial institution that the deceased had an account or accounts within a reasonable time frame. You’ll also need to pay any debts that may be owed to the creditor or institution.

Going Through Probate

As the executor, you will need to be aware of which assets go through probate. Some assets are designed to go through probate and others are not. In other words, if they are designated with the proper beneficiary titles, money may go directly to the beneficiaries that are listed on each account. As mentioned earlier, you may want to consider hiring a professional to help you make some of these decisions appropriately and understand how you can mark some of this stuff off.

If you are trying to establish your own affairs for the person that’s going to take care of things when you pass away, titling assets correctly and beneficiary designations is very important and can avoid the process of going through probate.

Being Paid as the Executor

Being the executor of an estate is a big job and will require a lot of your time and energy. Due to the time commitment and work that will be required, the executor of an estate deserves to be paid. This can be a little tricky to navigate, especially when family dynamics come into play. Family members may oppose the idea of the executor getting paid, but it something worth considering. Keep in mind, if the executor is already a large beneficiary, they may not want to get paid because that may be taxable income versus taking it through the process of closing the estate, which could be taxed differently.

Introducing All Parties Involved

If you are in the process of preparing your estate for when you pass, make sure that your attorney and financial advisor know who each other are to ensure that everyone’s on the same page. It’s easy for someone to miscommunicate, even as the executor, and it might be in your best interest to have a professional help the executor and your family through this process.

Final Thoughts

All of us want to make sure that if we are deemed the responsible party to somebody’s estate, that we do the right thing. Our advisory team at Financial Dynamics & Associates, Inc., will likely be able to help you directly and can recommend other professionals if needed. We want you to accomplish your goal as the executor which is to close out the estate effectively and in the most tax efficient way without causing yourself any concerns.

Advisory services offered through J.W. Cole Advisors, Inc. (“JWCA”). Financial Dynamics & Associates, Inc. and JWCA are unaffiliated entities.