What Does an Executor of an Estate Do?
2023-01-24
Posted at 18:52h
in Estate Planning, Wills
Have you ever wondered exactly what it means to be named as the executor of an estate? An executor has many important duties to carry out, and understanding what the executor of an estate has to do can help you make better choices. We put together this guide to help you understand what exactly an executor can and cannot do.
What Is an Estate Executor?
The executor of an estate is the person responsible for administering the assets in an estate and following the instructions left in the will. The executor is typically named by the decedent (the person who passed away) ahead of time in their will. But if there is no will, or if an executor is not named in the will, the court will appoint a personal representative.
Who Can Serve as an Executor?
The executor of an estate can be either a person or an institution such as a bank or trust company. In Arizona, anyone at least 18 years old and of sound mind is qualified to serve as an executor. Your estate executor can even be one of your beneficiaries.
As long as they are a person and not a “foreign corporation,” then your executor can legally live out-of-state. So if you or the executor moves before you pass away and you didn’t update the designation, then they can still serve.
However, it will be more difficult for an out-of-state executor to carry out their duties because they may have to navigate the laws of two different states, and travel long distances to administer your estate. It’s best to choose someone who lives relatively close, if possible.
It’s also a good idea to name a backup executor in your will, in case your top choice is no longer able to serve. If you die without a will or without naming an executor, the court will appoint someone for you.
The court chooses a personal representative based on the following priority: your surviving spouse, your adult heirs, the Department of Veterans Services, your creditors, or a public fiduciary. Or, if no executor was appointed, your surviving spouse, son or daughter, parent, sibling, or anyone else entitled to your property can apply to become the personal representative.
When Does the Role of Executor Start?
After the estate owner dies, the court will have to review and approve the decedent’s choice of executor. If they do not approve the choice or if the decedent did not name anyone, then the court will appoint a representative. Once the executor has been approved or appointed, they can start carrying out their responsibilities.
What Does the Executor of an Estate Do?
1: File the Will
The executor of an estate is responsible for obtaining a copy of the will and filing it with the local probate court. This step is necessary even if the estate avoids probate, because the court must validate the will.
2: File for Probate
If probate is necessary for the decedent’s estate, then the executor must file for probate. An estate with assets worth more than $75,000 or real estate property totaling more than $100,000 will be required to go through probate. If the estate doesn’t exceed these limits, or if the assets are held in a trust, then the executor can file a small estate affidavit to avoid probate.
3: Notify Interested Parties of the Death
After the decedent passes away, the executor must notify everyone who has an interest in the estate. They will need to contact:
- Beneficiaries
- Banks
- Creditors (including credit card companies)
- Social Security Administration
4: Manage the Estate’s Finances
Sometimes the estate owner can still receive income after their death, such as final paychecks or dividends. The executor must open up a bank account on behalf of the decedent to hold the money. They might need to settle outstanding debts, or terminate subscriptions and leases. They will also have to pay any ongoing expenses like mortgages and utilities using funds from the estate until the probate process ends.
5: Inventory the Assets in the Estate
The executor is responsible for collecting, evaluating, and managing all of the assets in the estate. In Arizona, the executor is required to send an inventory and appraisal of the assets to all parties interested in the estate within 90 days after assuming the role of executor. They might also need to file the inventory and appraisal with the court to prove that they completed this step.
6: Maintain the Estate Assets
Another responsibility the executor holds is maintaining the assets of the estate until they are distributed to the beneficiaries. Examples of assets that the executor may have to manage include:
- Bank accounts
- Personal property
- Life insurance or retirement proceeds
- Business interests
- Real estate property
7: Pay Taxes and File a Tax Return
Large estates (over 12.92 million as of 2023) are subject to the federal estate tax. Luckily, Arizona does not impose any state estate taxes. The executor will have to pay the federal estate tax, if the estate qualifies. The executor is also in charge of filing the decedent’s final tax return for income earned between January 1st of the year of their death, until the date they passed away.
8: Distribute the Assets
One of the final tasks the executor must perform is distributing the decedent’s assets to their beneficiaries. If the decedent left a will, then the executor simply carries out its instructions. But if the estate owner died intestate (without a will), then the court has to determine the next of kin.
9: Close the Estate
After completing all of the steps of administering the estate, the executor can then close the estate. They must file a petition with the court detailing how they completed the administration process and fulfilled their duties.
What an Executor Cannot Do
An executor cannot do any of the following:
- Put their own interests above the estate’s
- Override the will
- Add or remove assets to or from a trust
- Refuse to pay creditors
- Withhold inheritance from a beneficiary
- Take money from the estate
- Sell estate’s assets for less than their market value
It’s essential that you choose a trustworthy executor who will put your interests first. And if you’ve been appointed as an executor yourself, you should work with an experienced attorney who can help you through the process and keep you from making any mistakes.
Estate Administration in Arizona
Do you need help administering an estate? The attorneys at Phelps LaClair are experts in Arizona probate law and estate administration. We know that the role of executor can be confusing and overwhelming, so we’re here to help you through the process. Give us a call at 480-892-2488 to schedule an obligation-free consultation in Mesa, Chandler, or one of our other convenient locations.
Images used under creative commons license – commercial use (1/24/2023). Photo by Mikhail Nilov on Pexels
