Before agreeing to serve as an executor of someone’s estate, carefully consider the requirements and ramifications. Your duties could include any or all of the following:
· Accounting for assets and liabilities. You’ll need to locate and list everything the decedent owned, whether tangible (real estate and personal property) or intangible (bank accounts and investments). You’ll also be expected to identify and quantify each of the decedent’s debts.
· Determining whether probate proceedings are needed and, if so, petitioning the court.
· Locating (and sometimes identifying) heirs.
· Determining who inherits what, according to the will or according to state law if the will is ambiguous, invalid, or nonexistent.
· Administering the estate, including notifying financial institutions, creditors, and government agencies of the death, terminating leases and credit cards, setting up estate bank accounts, managing the decedent’s property, liquidating assets as needed, and paying applicable expenses and debts.
· Filing the decedent’s final income tax returns (from the beginning of the year to the date of death) and any additional returns required for the estate as a separate entity.
· Distributing the remaining assets to the people and/or organizations named in the will or otherwise entitled to inherit under state law.
As an executor, you’ll have a fiduciary duty to act honestly, diligently, and with good faith, and the law will hold you to these standards. Your duties will be time-consuming and may include unpleasant interactions with disgruntled heirs. You’ll almost certainly need to hire an accountant and an attorney to provide advice and prepare the necessary returns and filings.
Before accepting an executorship, ask to review the will, preferably with the attorney who prepared it. If your alarm bells continue to ring, consider tactfully declining the appointment.
David Compton is a Certified Public Accountant with offices in Meridian and Birmingham, Ala.