When a person dies with or without a will, the property of the deceased (the "estate") must be distributed to beneficiaries. The will usually names an executor. If the deceased did not leave a will, or if the will did not name an executor, the probate court will appoint one. Both the will and probate law determine the rights and duties of executors.
An executor must keep accurate accounting records of all estate assets, particularly those most likely to change in value between the time of the executor's appointment and distribution of assets (stock market holdings, for example). The probate court will examine these accounts at the conclusion of the executor's administration.
An executor must keep originals of all source data relating to all trust assets: receipts, cancelled checks, bills and more.
The executor must keep all estate assets separate from other assets. For example, all estate funds must be kept in separate estate accounts and not co-mingled with the executor's own funds. The executor may not profit from any transaction involving estate assets, even if those profits do not harm the beneficiaries.
The executor must provide the beneficiaries with access to accounting and financial records upon their request, and must prove these records are accurate. In some cases, the deceased's will may specify executor reporting obligations in greater detail.
The executor is entitled to invest estate assets to maximise their value for beneficiaries, unless forbidden in the will. The executor must invest with a level of caution and prudence that a reasonable person would exercise in dealing with personal assets. Nevertheless, the executor enjoys the right to exercise discretion and professional judgment in determining the nature of these investments, even over the objections of beneficiaries.
The executor must ensure the beneficiaries are aware of their rights, including the right to demand accounting records and inspect the condition of the assets. The executor also has the obligation to prove the state of accounts in probate court upon the petition of a beneficiary.
Though the executor has the right to exercise professional discretion when investing estate assets, it is not permissible to violate the terms of the will. The investments must be sufficiently balanced to protect the beneficiaries' interest. Tangible assets like equipment and vehicles must be adequately stored and maintained.
The executor is entitled to compensation averaging about five per cent of the estate's total value. This figure is based on a complex formula that utilises a variety of factors: the value of the estate, the complexity of its administration, the time the executor spent, the degree of care the executor exercised, the skill the executor displayed and the results of the executor's investments.