The executor of an estate carries many responsibilities. They have to manage the assets of the decedent, pay creditors, and distribute any remaining assets. This can take a lot of time and money. Have you been assigned as executor of an estate? The law office of Attorney Mark E. Hall can be a helpful guide so that you know exactly what your responsibilities will be.
What is an Executor?
When a person dies, their last will and testament have to be properly distributed. This is performed by the executor of an estate. The executor is responsible for managing the assets, paying creditors, and ensuring they are divided up correctly. An executor is typically chosen by the decedent, but it is sometimes court-appointed if no executor was chosen.
Responsibilities of an Executor
The responsibilities of the executor can be divided up into three main categories—managing assets, paying creditors, and distributing assets.
Managing assets refers to the many responsibilities an executor has to take on directly after the decedent’s death. This can include disposing of prescriptions, forwarding mail, canceling credit cards, locating the original will, and receiving a death certificate.
One of the main things they will be responsible for includes submitting the will to the courts. Once the will is determined to be valid, they will have to contact the beneficiaries, procure legal counsel, gather signatures, and pay probate fees (if applicable).
In addition, the executor will want to compile all the assets the decedent had. This can sometimes be difficult, as the decedent could have offshore accounts, physical bonds hidden somewhere, stock certificates, etc.
After gathering all of the assets, the executor may need to liquidate them so that they can pay off any debts. After death, the decedent may still have certain debts that need to be paid. This can include credit card debt, home loans, car loans, etc.
If there is enough money to cover the debts with the liquidated assets, then the creditors can be paid in full. If there are not enough assets, then the creditors are paid in order of importance. The order is as follows:
1. Legal/Administration Fees
2. Funerary Expenses
3. Debts and Taxes with Preference Under Federal Law
4. Medical Bills
5. Debts and Taxes with Preference Under Arizona Law
6. Any other claims
In addition to any creditor’s claims, federal taxes also must be paid by the executor. This includes income tax, fiduciary tax, and estate tax.
After all creditors and taxes have been paid, the remaining assets can be distributed to the beneficiaries. These assets can include retirement accounts, real property, personal property, etc. The executor is responsible for ensuring that the assets are given to the correct person and that each asset has been assigned a beneficiary.
Does an Executor Get Paid?
Because there is so much work that goes into being an executor of an estate, they are typically paid. In some cases, the executor is a close family friend or relative who decides to waive payment in order to avoid the additional income tax. In general, the executor is paid an amount that is standard to the amount of work, time, and effort they spent on the estate.
Can I Make it Easier for the Executor?
As we mentioned, there is a lot of work that goes into being an executor of an estate. If your estate is very disorganized and you are worried an executor would miss some assets, there are things you can do to help the process. In many cases, the executor has to go through probate in order to manage and distribute all of the assets you have. Instead of going through probate, you can help them out by creating a living trust.
A living trust allows you to skip probate and lists out exactly what assets you have, how to access them, who you want them to go to, and how you want to pay your creditors. Obviously this makes it easier for your executor to properly do their job and makes it clear what your final wishes are.
Estate Planning Attorney in Arizona
Don’t wait to create an estate plan. Start one today. A proper estate plan can help you and your executor be prepared in the event of an emergency or accident. Not only can you write up your will and establish a living trust, you can also designate the power of attorneys, guardianship rights, etc. To get started, contact Attorney Mark E. Hall. He and his team are ready and willing to help. We have assisted thousands of people with planning their estate and helped executors of an estate properly attend to their duties. Call us today at (480) 495-6963 to schedule a consultation or use our online contact form.