An executor is an individual entrusted with the duties and responsibilities of taking care of a person’s earthly affairs after death. In simple terms, the term executor refers to the person named or nominated by an individual, called the “testator,” to carry out his or her wishes as stated in a will. An executor of an estate has many other duties, however, as he is responsible for wrapping up the decedent’s financial obligations. To explore this concept, consider the following executor definition.
Definition of Executor
- A person named in an individual’s will, to carry out the provisions of the will.
1250-1300 Middle English executour
What is an Executor
An executor is a person who has been given the responsibility of taking care of an estate, including any existing financial issues, after a person dies. The executor of a will can be a family member or friend, most commonly being a child or a parent, or may be a legal representative. An executor is not required to have expertise, or even experience, in dealing with financial or probate matters, but should be honest, diligent, and impartial, as he is acting on behalf of another person.
Executor of Estate
The terms executor, executor of will, and executor of estate are often used interchangeably, but they all define the person nominated to carry out the wishes of a deceased person. When an individual is named executor of estate, he faces an array of duties for which he may not be prepared. The duties of an executor revolve around settling the testator’s estate, disposing of the assets, and paying any debts. If the duties seem overwhelming, or the estate is particularly large, the executor of estate may enlist the help of an estate-planning attorney.
Laws governing executors and other probate issues vary by state, but in all states, if an executor mismanages estate funds, or uses them fraudulently, he may be held personally liable. Because of the seriousness of these responsibilities, an individual named executor of a will may refuse the position, and a named alternate executor will be used. If an alternated executor was not chosen by the testator, the court may appoint one.
Duties of an Executor
Many people feel it is an honor to be named estate executor, to handle the affairs of someone they love and care for after their passing. The duties of an executor vary, however, and some estates are more complex than others to manage. Settling a decedent’s estate may be a time consuming and complex undertaking, and if the executor feels he cannot handle the job, he should either get help, or pass the duties of an executor to someone else who is able. The most common duties of an estate executor include:
- Locate and Manage Assets – all of the deceased’s assets must be located and distributed according to the terms of the will.
- Pay Taxes – all taxes owed by the deceased, as well as estate taxes, must be paid from the proceeds of the estate.
- Maintain Property – all property of the estate, including land, buildings, and personal property, must be maintained until it has been distributed.
- Determine if Probate is Required – estate assets are distributed according to the will, but any assets not mentioned in the will may be required to go through the probate court process.
- Identify and Locate Beneficiaries – all individuals named as beneficiaries (“inheritors”) in the will must be located, and property distributed to them as specified in the will.
- File the Will in Probate Court – regardless of whether probate court proceedings are needed, many jurisdictions require the will be entered into the court’s record.
- Handle Everyday Details – such tasks as terminating leases, closing accounts, and notifying agencies that the testator has passed must be handled by the executor.
- Open Estate Bank Account – to hold estate funds, from which bills and taxes will be paid, and the balance distributed to beneficiaries, after which the account is to be closed.
- Pay Bills – use the estate’s funds to pay bills, including utility bills, mortgages, taxes, and other outstanding debts.
Example of Executor Duties
Sam names his best friend, Walter, as the executor in his will. When Sam passes away, his only assets include his house, which is owned outright, his car, and about $5,000 in his savings account. Sam did have a $100,000 life insurance policy, however, and a number of small debts. Walter, as executor, must determine just what assets Sam did own, what debts he owed, and who is named in the will to receive the assets.
Walter must notify the life insurance company, and Social Security of Sam’s passing, open a bank account to hold the life insurance proceeds and savings, and obtain a full accounting of debts owed. Sam’s funeral costs will be paid from the estate, as well as any taxes and debts as well, following which Sam’s daughter, as his sole beneficiary, will receive the house, car, and any money left after settling the other issues.
Estate Executor Fees
Estate executors have no automatic entitlement to be paid for their services, as in creating such an entitlement, the law would be promoting a conflict of interest. Most executors are, in fact, close friends or family members of the decedent, and do not accept payment, even if offered. Executor fees may, however, be provided for within the will itself, or an executor of a large or complex estate may apply to the court to be awarded executor fees. The amount that may be awarded by the court as executor fees varies by state, but is largely left to the discretion of the judge. It is illegal in all states for an executor to take money from the estate as executor fees without following the proper procedures.
Related Legal Terms and Issues
- Beneficiary– A person that is set to accept property based on a person’s will or trust.
- Debtor – A person who is in debt, or under a financial obligation to another.
- Decedent – A person who has died.
- Jurisdiction – The legal authority to hear legal cases and make judgments; the geographical region of authority to enforce justice.
- Testator – A person who has created a valid will.