You've Been Named Executor. Now What?
Although you may be honored to be asked to act as executor – sometimes called a personal representative – for someone's estate, be aware that it involves big responsibilities. You must perform your duties with care and diligence, or be held personally and legally responsible for errors and misdeeds. You have to meet with lawyers, pay bills, file taxes and distribute assets. Possibly most challenging, you may have to deal with distraught, disappointed or squabbling relatives of the deceased.
Your job as executor can be especially complicated if the deceased's records are disorganized and you have to spend a lot of time tracking down old financial and investment records, insurance policies and other assets. You are entitled to be paid for your efforts, but you should speak with an estate planning attorney before taking compensation out of the estate. California has specific rules about how you can be compensated.
Duties of an Executor
Before discharging your duties as executor, contact the California Superior Court in the decedent's county for the appropriate forms and filing information.
Your responsibilities as executor will vary with the size and complexity of the estate. Some typical duties include:
• Opening an estate bank account.
• Filing the will with probate court.
• Creating an inventory of all assets, including real and personal property, financial and investment accounts, life insurance policies, pensions and retirement plans, etc.
• Notifying the beneficiaries of the estate.
• Notifying all interested parties of the death, including the post office, financial institutions, employers – including the school district, CalSTRS or CalPERS, the Social Security Administration, Medicare, creditors, landlords, mortgage holders, utilities, etc.
• Managing the assets during the probate process. This may include getting property appraisals or valuations.
• Collecting money owed to the estate, such as life insurance proceeds, unpaid salary and debts.
• Paying household bills and other outstanding debts, claims and taxes.
• Filing the deceased's final federal, state and local tax returns, as well as federal and state estate tax returns, if applicable.
• Distributing the assets to the proper beneficiaries.
• Closing the estate. The estate is considered closed when all debts, taxes and expenses of the estate have been paid; all assets have been distributed; and the IRS and state (when applicable) provide tax clearances.
Your job as executor requires sensitivity and tact, but it may also demand financial acumen and a significant amount of your time. Consider partnering with an attorney and tax advisor to help ensure that all facets of managing and closing the estate go smoothly.
Neither CTAinvest.org nor any of its affiliates give tax advice. Consult a tax advisor or attorney for information specific to your situation.