If a loved one has asked you to become the executor, sometimes called a personal representative, of his or her will, you should be prepared for the responsibilities you will have if you accept the position. As an executor, you will be named in your loved one’s will as the person who will manage his or her final financial obligations after death.
The responsibilities of an executor
Typical responsibilities you can expect to take on as an executor, include:
- Collecting and managing your loved one’s assets
- Representing you loved one’s estate in court
- Using the estate to pay for final expenses, such as your loved one’s funeral, debts and estate administration
- Handling all your loved one’s final tax matters, such as filing income tax returns and estate tax returns and paying the appropriate taxes
- Distributing your loved one’s assets to the beneficiaries
While the above list outlines the basic duties you will be expected to complete, many of them require completing multiple smaller tasks. For example, you may need to appraise and sell assets to pay off expenses of the estate. Because there can be many steps to take to complete each duty, it is important to keep good records throughout the process.
Common mistakes to avoid
The executor position comes with many responsibilities and if they are not completed properly, you could be held responsible. One common mistake executors make is distributing assets before taxes and liabilities are paid. If you make distributions too early and there is not enough money left over for the estate to pay all its expenses, you could be held personally liable.
Another mistake executors often make is to incorrectly advertise the estate. Because creditors have a right to make a claim against the estate, they must be properly notified according to California law.
One additional mistake to avoid is failing to properly close the estate. In California, an estate can be closed as soon as all debts have been paid or the estate becomes insolvent, which could take years for some estates. When the time is right, you should file a petition for an order for final distribution of the estate.
Because of all the tricky responsibilities and possible pitfalls of managing someone’s final financial obligations, many executor’s find it helpful to work with various professionals throughout the process. Being named the executor of a will is an honor, but it comes with many, serious responsibilities.