How to Be a Good Executor

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How to Be a Good Executor

Question: A relative has informed me that she has named me her executor. While I am honored, how will I know what to do when the time comes to act in that capacity?

Answer: Congratulations! Your relative trusts you and has probably recognized your organizational skills and your desire to do a good job.

While your relative is living, have a conversation and ask her to talk you through some of the details you will need to fulfill the role of executor. Here are some questions to ask:

  • Where do you keep your will?
  • Do you have a file or list of important documents and how to find them?
  • Is there a place you keep important financial information?
  • Who is your lawyer (what’s their firm’s address and phone number)?

Reassure her that you are not asking for all the details of her financial life right now, but it will be helpful for you to know where to start when it is your job to settle her estate. Just ask her for a basic outline of where to look to find the information you need later.

When your relative passes away:

  • Find the will.
  • Get the death certificate.
  • Find any list of important documents, information on accounts and other financial affairs, etc.
  • Find all the estate documents (will, trusts, accounts, etc.) – the lawyer will know what they are.
  • Find names and companies of professionals (such as their lawyer, financial adviser, etc.).
  • Handle the affairs of the estate until the assets (after settling liabilities) are distributed to the heirs as indicated in the estate documents. This includes not distributing property until the debts are settled.

Four keys to being an executor:

  1. Treat it as a part-time job. Being an executor will require many hours of work and probably a fair amount of frustration. You will probably become good friends with a notary public.
  2. Hire help if you need it. Many wills include provisions which explicitly allow the executor to hire the help of professionals such as estate lawyers, accountants, real estate agents, and financial advisers. Depending upon the complexity of the estate you are winding up, it may be worthwhile to seek assistance from someone who is familiar with these aspects.
  3. Get organized. Keep meticulous notes, as this will help you later when you have forgotten the details of what happened because of the sheer volume of things to do. There is a lot to keep track of, including these:
    1. Locate the will and file it with the appropriate local court (likely in the county of residence). This filing and “opening” the will process is called probate. You may also need the court to appoint you as the estate’s “representative,” which means the court grants you authority to administer the estate.
    2. Obtain copies of the death certificate. Get at least 5 copies, and maybe as many as 15-20. There are many places that will require proof of death to proceed with your requests. You should also have copies of the court order that appoints you as the “representative,” or executor.
    3. Obtain a tax ID for the estate from the IRS, and open an estate checking account for expenses.
    4. Determine what are legitimate outstanding bills, and settle them.
    5. Get a copy of last year’s tax return, and prepare to file a final personal return and an estate tax return.
    6. Determine what the estate’s assets are, and how they should be divided amongst the heirs. Hopefully the will, and sometimes the assets themselves, will be clear on how to pass these to the right beneficiaries, but sometimes this can be a sticky issue.
    7. Secure the deceased’s house and belongings and do not allow relatives to take items until you have determined from the will what ought to be distributed. This may mean you need to change the locks and not distribute copies of the will to anyone else.
  4. Communicate with the heirs and beneficiaries. Let them know what is going on and what to expect, but remember that it isn’t your job to make them happy. Your job is to execute the wishes of the deceased, and while good communication may smooth the process, it is not your fault if the terms of the will anger an heir.

I wish you the best if you decide to accept this job, and I hope it goes smoothly when the time comes (which hopefully will not be for many years).

For more on getting your own estate in order, see my articles on a power of attorney and medical directives, organizing your physical assets, choosing an executor, and organizing your online /digital presence.

Photo used under Flickr Creative Commons License.

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Wealth Manager

Austin Fey is a Wealth Manager at Marotta Wealth Management, specializing in charitable giving and asset allocations. She is a regular contributor to our Marotta On Money articles, often giving advice to those just getting started in finance.