A will specifies your instructions as to how your assets will be distributed on your death. In the will, you name an executor to act as your personal representative and to deal with all the tax, investment, administrative, and other duties involved in distributing and overseeing your assets as per your instructions.
Some people feel honored to be named as the executor, in that it suggests respect and trust in their abilities. However, most people fail to realize how much responsibility is required, the amount of time and effort that the appointment often necessitates, and the family conflicts that might arise.
Here are some of the responsibilities of an executor:
→ Locate the will of the deceased. Determine that the will is the last will of the deceased.
→ Take control of the assets. Arrange security and insurance if required. Have the assets valued for the date of death.
→ Manage the assets for the estate as the trustee.
→ Dispose of perishable assets.
→ Contact financial institutions to change the name on the accounts to “the estate of”,
→ Open a bank account for the estate.
→ Arrange the probate of the will if applicable.
→ Assess the income tax situation and file any required returns.
→ Pay the bills of the deceased and the estate.
→ Make provision for the immediate needs of the spouse and any dependents.
→ Set aside reserve funds for the payment of estimated debts, taxes, probate fees, and compensation for the executor.
→ Prepare an interim distribution to the beneficiaries if available.
→ Make the funeral arrangements if necessary. Obtain the death certificate.
Conflicts often arise between the executors and the heirs. The beneficiaries may be suspicious of the executor because he or she does not have enough knowledge or skills, is insensitive, is too hasty, shows favoritism, etc. Anyone who is appointed as an executor should be aware that these are common situations during emotional times.
An executor requires many skills. One of the most important is the ability to know when outside expertise is required. An executor frequently hires a lawyer, accountant or trust company for assistance. Sometimes, appointing an independent outside party, such as a trust company as the executor may be the best choice, especially when a family conflict can be expected, although it can be costly.