For most people, a Last Will and Testament serves as the cornerstone of their comprehensive estate plan. If you are just now creating your Will, you will need to make a number of important decisions during the creation process. While those decisions will predominantly focus on deciding who will receive your estate assets when you are gone, there is another decision you must make that is of equal importance, yet is frequently given very little thought. You will need to appoint someone as the Executor of your Will. All too often, people simply choose a spouse, parent, or adult child as the Executor of a Will without considering if that person is the best person for the job. In order to decide who the best person is for the job, however, you need to know what the duties and responsibilities of an Executor of a Will are during the probate of an estate.
The Executor’s job begins the moment he/she is notified of the death of the Testator. If the Executor has an original copy of the Will he/she is required by law to present the Will to the appropriate court and initiate the probate process.
Identifying, Locating, and Valuing Assets
The next thing an Executor must do is to identify all the estate assets and then figure out which ones are probate assets. Estate assets include all real and personal property as well as all tangible and intangible assets. Because not all assets are required to go through the probate process, an Executor must figure out which assets are non-probate assets, such as trust assets, proceeds from a life insurance policy, and certain types of jointly held property. Once all probate assets have been identified and located the Executor must determine a Date of Death (DoD) value for each asset. This often requires the assistance of a professional appraiser. The court may also require the Executor to prepare an inventory of all estate assets along with the DoD values.
The Executor must also notify all beneficiaries and creditors of the estate that the probate process is underway. Known creditors are notified personally while unknown creditors must be notified by publishing notice of the probate in local newspapers. Creditors of the estate then have three months in which to file a claim against the estate. All claims filed against the estate must be reviewed by the Executor and approved or denied. Approved claims are paid out of estate assets. Creditors that are denied may appeal to the court. If insufficient liquid assets exist to pay approved claims the Executor must sell estate assets in order to raise the necessary funds.
Defending the Estate
Sometimes, challenges to the estate arise. A Will contest, for example, might be filed by a beneficiary, heir, or other interested party. If that occurs, the Executor is responsible for defending the Will throughout the ensuing litigation. The entire probate process effectively comes to a halt while the Will contest is litigated because the outcome determines what happens next.
Filing and Paying Taxes
Before any assets can be distributed to beneficiaries or heirs of the estate, all federal and/or state gift and estate taxes must be paid. Therefore, the Executor is responsible for preparing and filing all necessary tax forms and paying any tax debt owed to the state or federal government. This may also require the sale of estate assets if sufficient liquid assets are not available. An error in the calculation of tax liabilities, or a failure to file on time, can be extremely detrimental to the estate’s value.
Transferring Assets to Beneficiaries and/or Heirs
Once all tax liabilities have been paid, and a final inventory filed with the court, the Executor must prepare any documents, or take any steps, necessary to effectuate the legal transfer of the remaining estate assets to the intended beneficiaries or heirs of the estate.
Choosing the wrong person for the Executor of a Will can result in lengthy delays during the probate of your estate as well as additional, and unnecessary, costs that can significantly diminish the value of your estate. If you have additional questions about choosing the right Executor for your Will contact the experienced New Hampshire estate planning attorneys at Debruyckere Law Offices by calling (603) 894-4141 or (978) 969-0331 to schedule an appointment.