When you die, someone will need to administer your estate. This person is known as the executor.
What does an executor do?
An executor must perform several tasks. These include:
- Pay the funeral expenses: The money comes out of your estate, not their pocket.
- Account for all your assets: If you leave a thorough inventory of assets, this makes the executor’s job simpler.
- Put the will through probate if necessary: An attorney can advise you if probate is needed or not.
- Notify people: The executor must notify beneficiaries, creditors and relevant government agencies such as Social Security of your death.
- Continue specific payments: If you have ongoing mortgage payments or energy bills, the executor needs to keep paying these from your estate until the property passes hands.
- Pay your creditors: Your executor must pay your debts from your estate before they can distribute what remains.
- Pay any taxes on the estate: Efficient estate planning while you are alive will reduce the taxes payable on the transfer of your estate.
- Distribute your assets as per your will: This can only happen once everything else is settled.
Does an executor make money from the estate?
An executor is not allowed to use the estate for their own benefit. However, they can claim for their time and costs.
Who chooses the executor?
You can name an executor for your will. If you do not, then a court will appoint one. Make sure you get the person’s consent before you designate them. It can be an arduous and time-consuming task, so not everyone will want the responsibility.
Who can act as executor?
You may wish to appoint a family member. There is nothing to stop you from naming an executor who is also a designated beneficiary. Alternatively, you may want to choose an attorney or finance professional to carry out the duties.