The Executor's Job

What's involved in wrapping up an estate.

Essentially, the executor's job is to protect the deceased person's property until all debts and taxes have been paid, and to see that what's left is transferred to the people who are entitled to it.

The law does not require an executor to be a legal or financial expert or to display more than reasonable prudence and judgment. It does, however, require the highest degree of honesty, impartiality and diligence. This is called a "fiduciary duty" -- the duty to act with scrupulous good faith and candor on behalf of someone else.

Executors have a number of duties, depending on the complexity of the deceased person's estate. Typically, an executor must:

• Decide whether or not probate court proceedings are needed. If the deceased person's property is worth less than a certain amount (it depends on state law), formal probate may not be required.
• Figure out who inherits property. If the deceased person left a will, the executor will read it to determine who gets what. If there's no will, the administrator will have to look at state law (called "intestate succession" statutes) to find out who the deceased person's heirs are.
• Decide whether or not it's legally permissible to transfer certain items immediately to the people named to inherit them, even if probate is required for other property.
• If probate is required, file the will (if any) and all required legal papers in the local probate court.
• Find the deceased person's assets and manage them during the probate process, which may take up to a year. This may involve deciding whether to sell real estate or securities owned by the deceased person.
• Handle day-to-day details, such as terminating leases and credit cards, and notifying banks and government agencies -- such as the Social Security Administration, the post office, Medicare and the Department of Veterans Affairs -- of the death.
• Set up an estate bank account to hold money that is owed to the deceased person -- for example, paychecks or stock dividends.
• Use estate funds to pay continuing expenses -- for example, mortgage payments, utility bills and homeowner's insurance premiums.
• Pay debts. As part of this process, the executor must officially notify creditors of the probate proceeding, following the procedure set out by state law.
• Pay taxes. A final income tax return must be filed, covering the period from the beginning of the tax year to the date of death. State and federal estate tax returns may also be required, depending on how much property the deceased person owned at death and who inherits it.
• Supervise the distribution of the deceased person's property to the people or organizations named in the will.