An executor is a person assigned to enact the final wishes and desires of someone who has passed away, according to their last will and testament. Executors are responsible for managing the assets of the deceased person’s estate. This can include tasks such as paying debts or taxes and distributing the remaining assets to the beneficiaries. Becoming an executor is a big responsibility and can take up much time. Thus, individuals drafting their will must select someone who can meet these duties and ask their permission before appointing them as an executor. Anyone over the age of 18 with the mental capacity to understand an executor's responsibilities can be named one in a will. However, it is crucial to appoint someone capable of carrying out the role's responsibilities. Individuals drafting their will may want to look for someone organized, reliable, and able to handle financial matters. It is also a good idea to appoint someone trustworthy and with the skills and resources to effectively manage the estate distribution. As long as they meet the basic age and mental capacity requirement, people named as beneficiaries in the will can also be assigned as its executor. Some potential executors may include: It is also possible to appoint multiple executors. This may be useful if the estate is large or complex or if the testator wants to distribute responsibilities among various individuals. However, this is more complicated and can cause conflict. Thus, it is not often recommended. Here are some specific duties that an executor may be responsible for: The first step in probate, which is the legal process of proving and validating a will, is to submit and file the will and all related documents to the appropriate court. The executor must do this within a specific time frame, which can vary by state. The executor must identify, gather and safeguard all the testator’s assets, including real estate, personal property, bank accounts, and investments. This duty also includes confirming the value of these assets before they are used to pay liabilities or distributed to beneficiaries.
Executors must use the gathered assets to fulfill the decedent’s outstanding debts or liabilities. This can include filing for estate taxes, paying off loans, and allotting money for funeral expenses.
The executor must notify all the beneficiaries named in the will of their inheritance. This may also involve providing them with copies of the will and keeping them informed about the progress of the probate process. After all liabilities are fulfilled and the probate process is completed, the executor must transfer ownership of the remaining assets to the designated beneficiaries. This must be done according to the terms of the will and may involve selling assets, transferring titles, or distributing cash. If there are any disputes or challenges to the will, especially among the named beneficiaries, the executor may need to work with the court and legal counsel to resolve them. Executor fees are the compensation that an executor receives for carrying out the duties of their role. Although some wills may not mention compensation, and some executors may not want to ask for it, some states include these fees in their probate code. Executor fees across the United States are diverse and subject to varying regulations. For example, in New York, executors can earn 2% to 5% of an estate, depending on its value. Other states have no specific percentage but allow the probate court to determine the amount. If the estate's value necessitates professional help, such as from an accountant or lawyer, then additional fees may be charged on top of the executor's fee. Furthermore, if there are multiple executors, they are each entitled to compensation, which will be paid out of the estate. The two main ways in which an executor can be appointed are: The most common way to appoint an executor is by naming them in the will. The testator can specify whom they would like to serve as their executor and outline their duties in the will. The testator needs to meet with a prospective executor before naming them in the will. The testator must ask for this person’s permission and ensure they understand the duties and responsibilities they will be undertaking. If the will does not name an executor, or if the named executor is unable or unwilling to serve, the court can appoint an executor. This is known as a “court-appointed executor” or an “administrator.” The court may appoint a relative or the person who will inherit the most from the estate. Alternatively, the court could appoint a professional, such as an attorney or financial advisor, to serve as administrator if there is no suitable person among the next of kin. An executor is a person responsible for carrying out the terms of a will after the testator has passed away. Executors play a significant role in enacting a testator's wishes. Thus, it is better to assign one in the will rather than wait for one to be appointed by a probate court. Anyone over the age of 18 with the mental capacity to understand an executor's responsibilities can be named one in a will. However, it is crucial to appoint an executor who is both capable and trustworthy since it is a big responsibility that can take up much time. If they meet the basic requirements, people named as beneficiaries in the will can also be assigned as its executor. Commonly assigned executors include a spouse or a partner, adult children, relatives, close friends, or professional advisors such as an estate planning lawyer. An executor is responsible for various duties, including submitting the will to court, identifying assets, paying liabilities, resolving disputes, and more. In return, they are compensated for their service through fees mentioned in the will or mandated by the court.What Is an Executor?
Who Can Become an Executor?
Duties of an Executor
Submitting the Will to Court
Identifying Assets
Paying Liabilities
Notifying Beneficiaries
Transferring Assets
Resolving Disputes
Executor Fees
How Do You Appoint an Executor?
By the Will’s Testator
By the Court
Final Thoughts
Executor FAQs
An executor is a person responsible for carrying out instructions in a will after the person who made it dies. Executors are responsible for managing the deceased person’s estate, including paying debts and distributing assets to beneficiaries according to the terms of the will.
Although an executor and trustee may have similar responsibilities, they differ in some ways. An executor is appointed in a will and is responsible for managing the deceased person’s estate. In contrast, a trustee is appointed by the person who establishes a trust and is responsible for managing the assets placed in the trust.
Yes, it is possible for an executor also to be a beneficiary of a will. In this case, they will be responsible for carrying out their duties as executors while also receiving assets or benefits from the estate as a beneficiary.
Yes, executors may be entitled to receive compensation for their work in administering an estate. The amount of payment an executor gets may be based on the size and complexity of the estate and the time and effort required to manage it.
The most common way to assign an executor is by the testator naming them in the will. Alternatively, if the will does not name an executor, or if the named executor is unable or unwilling to serve, the court can also appoint an executor, also known as an administrator.
True Tamplin is a published author, public speaker, CEO of UpDigital, and founder of Finance Strategists.
True is a Certified Educator in Personal Finance (CEPF®), author of The Handy Financial Ratios Guide, a member of the Society for Advancing Business Editing and Writing, contributes to his financial education site, Finance Strategists, and has spoken to various financial communities such as the CFA Institute, as well as university students like his Alma mater, Biola University, where he received a bachelor of science in business and data analytics.
To learn more about True, visit his personal website or view his author profiles on Amazon, Nasdaq and Forbes.
