Your Last Will and Testament will likely provide the foundation for your entire estate plan. As such, the decisions you make in your Will should be made only after careful consideration. This applies not only to decisions that relate to the distribution of your estate assets, but also to the decision of who to appoint as the Executor of your estate. People frequently make the mistake of simply filling in the name of a spouse, family member, or close friend as the Executor in their Last Will and Testament without giving any real thought to the duties and responsibilities of an Executor. So, what exactly does the Executor of a Will do? The Executor has a wide range of duties and responsibilities that can, collectively, lead to an efficient and cost-effective probate process, or can slow down the probate of your estate and diminish the value of your estate.
If the Executor has an original copy of the decedent’s Last Will and Testament, he/she is required by law to present the Will to the appropriate court and initiate the probate process. Typically, the Executor will also file a petition to be officially appointed as the Executor at the same time because the court must officially appoint the Executor. Usually, an Executor retains the services of an estate planning attorney at this point to assist in the probate of the estate; however, the Executor remains responsible for overseeing the entire process.
Identifying, Locating, Securing, and Valuing Estate Assets
The Executor must identify, locate and secure 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 probate assets and which are considered non-probate assets. Once all probate assets have been identified and located the Executor must obtain a Date of Death (DoD) value for each asset. The court may also require the Executor to prepare an inventory of all estate assets along with a DoD value for each estate asset.
Notification of Creditors
The Executor must notify all 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 a local newspaper. Creditors of the estate then have a statutory period of time within which they must file a claims against the estate. Those claims are then reviewed by the Executor and approved or denied by the Executor. Approved claims are then paid out of estate assets if sufficient assets are available. If insufficient liquid assets exist to pay approved claims the Executor must decide which estate assets to sell in order to raise the funds necessary to pay the creditors.
Defending the Estate
In the event that a Will contest is filed, 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. As such, 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.
Once all taxes 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.
For additional information, please download our FREE estate planning worksheet. If you have additional questions or concerns regarding , 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.