An executor is named in a will. The testator, or person creating the will, often names an accountant, attorney or family member to carry out his last wishes as well as take charge of financial obligations and distribute assets among heirs. The executor's job begins at the moment of death and ends when the last tax return has been filed and all assets have been distributed.
Funeral and Burial
The will frequently spells out the wishes of the deceased. It may indicate whether someone wants to be buried or cremated, what funeral home is to be used, where the burial is to take place. But if these are not specified, the executor makes the decisions. The executor is also responsible for paying for the funeral or burial. He may need to contact the bank or file for life insurance to make sure funds are available.
Probate courts certify a will is legitimate. Even if an executor is named in the will, he still needs to be appointed by the probate court. A will must be probated before any assets are distributed to the heirs and many financial institutions will not release monies or provide information about accounts without a copy of the probated will. A will is normally probated in the state the deceased lived, however, if property was owned in other states, it may need to be probated in those states as well.
Creating an Estate Checking Account
Because the executor must take control of financial accounts, liquidate assets, pay bills and taxes and distribute to heirs, a current account, in the name of the estate, is usually needed. Banks will need a copy of the probated will in order to set up the current account.
Bank Accounts and Life Insurance
The executor needs to consolidate the deceased's bank accounts and transfer the money into the newly created estate current account. If there are life insurance policies, the executor is responsible for filing the claims and distributing the payments to the beneficiaries or placing the money into the current account.
Managing Personal Matters
Besides the financial aspect of being an executor, there may be responsibilities such as notifying the state to have a driver's license turned in, cancelling insurance policies, such as car insurance, having utilities, such as phone and electric turned off, and informing credit card companies of the death. Assets need to be sold; property such as cars or homes may need to be transferred into the estate's name prior to the sale. Proceeds are added to the estate current account.
Distributing to Heirs
The will may spell out exactly what each heir should receive. If there is no specifics, the executor determines who receives what based on laws of descent. There is normally a "reading of the will." All heirs are invited to hearing the will read. Bills and taxes must be paid from the account before any distribution to the heirs.
Completing Tax Returns
Executors must file final tax returns and pay all taxes due and would be responsible for any late penalties or interest. The executor must file taxes for the year of death, as well as any previous years taxes that were not filed. The final tax return is due on the same day it would have been due, had the deceased still been alive. For example, if someone dies on March 1, 2010, a tax return for 2009 would need to be submitted by April 15, 2010 and a final tax return for 2010 would be due by April 15, 2011.