Sunday, December 2, 2012

If There's A Will There's A Way

Being chosen as an executor can be both an honor and an obligation depending on the estate and the complexity of issues that arise. So a potential executor should make sure he or she knows what he or she is getting into before accepting the responsibility. The job of executor is defined as the person named to distribute a deceased person’s property that passes under his or her will, and arranges for the payment of debts and expenses. These duties apply even if a person dies without a will. In these cases, the court appoints a person called the administrator of the estate. All of the information below applies to executors no matter how he or she got the job. We will refer to this person as the executor throughout the course of the article. What follows are the top 10 duties and responsibilities of an executor.

Top 10 Duties and Responsibilities of an Executor

An executor is legally responsible for sorting out the finances of the person who died, generally making sure debts and taxes are paid and what remains is properly distributed to the heirs.

Texas law varies on the requirements of who can serve as executors, but generally, executors tend to come from the close ranks of a family—spouses, children, parents and siblings. Although state law provide for the payment of executors, since so many executors are close family members, they often don’t ask to be compensated. In addition to carrying out duties in a diligent, impartial and honest manner, an executor may also be required to perform any or all of the following activities, among others:

1. Get a copy of the will and file it with the local probate court
The executor is in charge of locating, reading and understanding the will—usually even if probate isn’t necessary, the will still must be filed with the probate court. At this step, the executor also determines who inherits the property.

2. Notify banks, credit card companies and government agencies of the decedent’s death
The Social Security Administration along with the decedent’s bank and credit card companies are just some examples of who should be notified of the death.

3. Set up a bank account for incoming funds and pay any ongoing bills
If the decedent is owed money such as incoming paychecks, this account can hold them. An executor should be on the lookout for mortgages, utilities and similar bills that still need to be paid throughout the probate process.

4. File an inventory of the estate’s assets with the court
In Texas, the court requires the executor to submit a detailed inventory of the assets in probate estate only in more extensive estates.

5. Decide what kind of probate is necessary
Because inheritance laws may facilitate the passing of certain properties without probate (such as property held jointly by a husband and wife), probate isn’t always necessary. Additionally, the value of the estate may allow it to pass through an expedited process.

6. Maintain property until it can be distributed or sold
This includes keeping up a house until it is distributed to heirs or sold—even deciding whether property needs to be sold at all. Also, an executor must be sure to find all personal property in the estate and protect it until distribution. If the decedent had a safety deposit box, the executor should locate it and keep it safe.

7. Pay the estate’s debts and taxes
Texas law dictates the procedure for notifying creditors, and the estate must also file final income tax returns from the first of the current year until the date of the decedent’s death. If the estate is large enough, there may be state and/or federal estate taxes to pay as well.

8. Distribute assets
Distribution occurs according to the wishes expressed in the will. If there is no will, state intestacy laws apply.

9. Dispose of other property
If there is any property left after paying off the estate’s debts and distribution to heirs, the executor is responsible for disposing of it.

10. Represent the estate in court
An executor may be required to appear in court on behalf of the estate.
Since estates vary greatly in size and complexity, an executor's job may be easy or challenging to carry out—and responsibilities may very well go beyond the 10 basic items in this list. But while an executor can decline the position or resign at any point in the process, sometimes all that is needed is some legal advice. Consulting with an attorney is generally to make sure that the executor properly complies with his or her duties.

Your Wichita Falls legal team at the Law Office of Bruce Harris can help guide an executor through the probate process. Click for more information.

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