UNDERSTANDING THE ROLE OF AN ESTATE EXECUTOR IN TEXAS
Estate planning and the administration of an estate plan are full of esoteric terms and phrases. When the time comes to administer the estate plan or the will of a loved one, it’s important to have a basic understanding of the process and related terminology. To start, the person named in the will charged with the legal responsibility to wrap up the deceased person’s financial obligations and property disposition is the executor, but what exactly are the executor’s responsibilities and duties?
Every executor must fulfill his or her duties with honesty and diligence and must execute the wishes memorialized in the will with good faith. An executor is therefore taking on a serious legal undertaking and needs to be organized and detail-oriented because the court will hold the executor responsible. The length of an executor’s role depends on the complexity of the estate. The duties of an executor can be broken down into four stages: present the will, gather assets, pay the estate’s taxes and debts, and distribute the assets.
PRESENT THE WILL
The will is presented to the probate court to ensure correct people receive the assets of the estate. Probate is simply a court-supervised process of transferring property upon a person’s death. The first step in that process is validating the will and proving the deceased has actually passed away, which is usually demonstrated with a death certificate. After a short hearing, the judge issues an order that indicates the named executor has the authority to act on behalf of the estate and has formally been approved by the judge to do so. After the executor’s authority has formally been approved by the judge, the executor is in charge of administering the estate and can access accounts, transfer assets and communicate with third parties. The next step is to collect all of the probate property of the deceased.
In order to satisfy any outstanding financial obligations and transfer property, an inventory of the estate’s assets must be completed. The executor needs to make a list of assets with titles, such as real estate and vehicles, and a list of bank accounts and investments. The executor should also inventory personal property of the estate, such as furniture and antiques. Insurance on any property needs to be maintained until it is sold, and the executor should also set up a bank account for the estate to ensure the estate’s money is separate from the executor’s.
If the estate has an ongoing business that needs management, the executor may have to ask the probate court if a trust can be set up for its management. If the estate has real estate in a different state, the executor will have to start a separate probate process in that state for its disposition. Once the inventory of the property and assets is complete, the executor must resolve any outstanding financial obligations before the assets can be distributed.
PAY THE ESTATE’S TAXES AND DEBTS
The debts and therefore the creditors of the deceased need to be paid. The executor will notify all creditors of the death of the individual; however, before paying any debt it should be validated to ensure it is a legitimate debt of the estate. The executor is also responsible to file tax returns for the deceased individual and estate, and taxes are paid from the estate. Moreover, the executor is not personally responsible for the debts of the estate and should never make a personal promise to pay. The executor is also responsible for wrapping up any other affairs of the deceased, such as canceling credit cards to contacting the Social Security Administration regarding payment of benefits. If any assets remain, property distribution comes next.
DISTRIBUTE THE ASSETS
After the finalization of outstanding debts and taxes, the executor is in charge of making sure the property that is named in the will goes to the appropriate people. That means the executor must find and contact the people named in the will who are supposed to receive money and assets. After doing so, the executor distributes the specific gifts to individuals as provided in the will. Any asset not named in the will is divided under the state law. After the assets are distributed, the executor goes back to probate court and asks the judge to close the estate and discharge the duties of executor.
The administration of an estate can quickly become complicated. If you are named as an executor, contact an experienced estate and probate attorney who can help guide you through the closing of an estate.