Being chosen executor of an estate indicates that you are capable and trustworthy. You are most likely a family member, a close friend or attorney of the individual who has asked you to ensure their final wishes are carried out.
While being named the executor, or personal representative, of someone’s estate is somewhat of an honor, it also entails a number of responsibilities and makes demands on your time. You must ensure that everything requested in the will is done, or you could be held legally responsible. In the meantime, you must protect the estate’s assets and ensure that all debts are paid or collected.
What Does an Executor of an Estate Do?
Below are 10 steps you should know about as you accept the responsibilities of an estate executor.
Estate Executor Checklist Immediately After a Death
This is what an executor needs to do:
- Secure the estate. Take charge of everything the deceased owned. Either make sure the business and/or household continues to run if survivors live at the family home or secure access to the premises, including hiring someone to house-sit if necessary or having valuables removed for safe storage. Criminals target homes of the recently deceased. Friends and family may help themselves to items they do not have a right to take. Cancel subscriptions, such as for cablevision, internet, cellphone, publications. Arrange to collect the mail or have it forwarded to you and arrange for yard maintenance.
- Obtain the death certificate. You’ll need 10 to 20 “original” death certificates to accompany paperwork ahead of you. The funeral home should be able to obtain them for you for a fee. You’ll need them to file the will in probate court, change ownership of joint accounts, and obtain date-of-death values of investments.
- Get a copy of the will. You may already have a copy of the will and/or other documents, which you have stored safely. Notify beneficiaries of the deceased’s passing. Make sure close relatives, such as the surviving spouse and children, also know that you will act as executor of the estate. Those who would have been entitled to property had there been no valid will may benefit from distribution of the estate’s assets, regardless of the will’s contents. Arrange to stay in contact with beneficiaries and potential beneficiaries.
Executor of Estate Duties Within 3 Months of a Death
- Start an inventory of assets. Compile a record of the contents of the estate, including its assets and debts, to determine its total value. This may be an extensive process for a large or complex estate. You should begin to keep an accounting of your costs to administer the estate and any other estate-related transactions, including receipts and other documentation. You should be reimbursed by the estate but will be required to document your expenses.
- Contact life insurance companies and other beneficiary accounts. Notify insurance firms and companies administering any financial instruments in the deceased’s name, such as IRAs and 401(k)s, of the death. Contact the deceased’s employer and arrange to obtain any pay or insurance payout due. Often the beneficiaries of these accounts will contact the appropriate companies, but the estate’s executor should make sure the process for transferring funds commences.
- Set up a bank account in the estate’s name. Make sure mortgages, utilities and similar bills are paid throughout disposition of the estate. Notify potential creditors so no further interest accrues and to verify the final balance owed. Notify the Social Security Administration of the death to ensure survivors receive benefits due. (The funeral home may do this; check with them.)
- Determine what level of probate is necessary and begin probate. Probate is the court-supervised distribution of an estate’s assets. Many assets of an estate can be passed to assigned beneficiaries or joint owners without going through probate. Smaller estates may avoid probate or qualify for a streamlined process.
File the will (assuming there is one) in the local probate court and ask the court to confirm you as the estate’s personal representative. Within 90 days of appointment as executor or estate administrator, you must file a detailed inventory listing the deceased’s real and personal property. The inventory should include the estimated value of each asset, which may require obtaining appraisals. While the “90-day Inventory” itself isn’t due until 90 days after the executor is formally appointed by the court, the values indicated must be the values as of the deceased’s date of death, not the date the inventory is filed.
Executor of Estate Duties within 6 Months to a Year after a Death
- Finalize and execute an asset distribution plan. The asset distribution plan should satisfy your legal obligations to the estate while satisfying the estate’s heirs. The will should specify the deceased’s desires for how specific assets are to be distributed, or among whom they should be divided. If there is no will, state intestacy laws apply.
Final asset disposition includes paying the estate’s debts, which may require selling some assets. Some heirs may want specific assets not cited in the will. You’ll need to sell or otherwise dispose of assets not going to heirs or of no saleable value. Once a plan is in place and debts are paid (including taxes, below), ensure the distribution of property to the people or organizations named in the will.
- Pay the estate’s taxes. You must file federal and state income tax returns for the year in which the person died. Depending on the date of death, income tax returns may be due sooner than within six months, but extensions are available. The federal estate tax, which applies to estates worth more than $11.4 million, is to be paid within nine months of death, but a six-month extension is available. North Carolina has no separate state estate tax, inheritance tax nor gift tax.
- Close the estate. Close the estate bank account after all debts are paid and assets are distributed. Once all claims against the estate have been satisfied, file a final accounting with the probate court and ask that the estate be closed. If you are not ready to close the estate as of one year after the death, you must file an annual accounting with the court to include bank statements and a description of dispersal of the estate’s assets.
As you can tell from this brief overview and checklist, administering an estate can be time-consuming and complicated. An estate executor’s job may be more complex than indicated here depending on the size and value of the estate, the family involved or other factors. The executor of an estate can face liability for errors during probate, as well.
The experienced estate administration lawyers at Brady Cobin Law Group in Raleigh, N.C., can help with guidance and assistance if you are in charge of the disposition of an estate in North Carolina. Please don’t hesitate to contact us for a consultation. Fees for estate administration assistance are legally reimbursable from the estate’s assets.