Learn About the Role of an Executor or Executrix
Some duties can vary but most are common.
An executor—sometimes referred to as an executrix when a woman assumes the job—is the individual responsible for managing the affairs of a deceased person’s probate estate. A decedent can no longer own property, so everything he owned at the time of his death must be legally transferred to living beneficiaries.
This is where probate comes in and what it accomplishes. It's the legal process of making sure that the decedent's debts and liabilities are paid off from the cash and assets he left behind, then transferring ownership of what remains to his beneficiaries.
What's in a Word?
"Executor" is the more commonly used term these days for an individual who serves in this position, even when she's a woman. "Executrix" is something of a holdover from more gender-specific days gone by.
Sometimes the gender-neutral term “personal representative” is used in place of either executor or executrix, although this term can also designate someone who is named to handle an intestate estate, one where the decedent died without leaving a will. In this case, his possessions must be transferred according to state law rather than his own wishes as he set them forth in a last will and testament.
The Probate Process
Probate can last months or even years in some cases when an estate is extremely complicated, and the executor is responsible for managing the estate throughout the entire legal process. This typically involves seeking approval from the probate court before taking most actions and making numerous court filings.
Submitting the Will for Probate
The executor's first order of business is to submit the decedent’s last will and testament to the probate court. This officially begins the process of opening the probate estate.
The executor must then attend a hearing where the judge will determine if the will is valid—it meets the letter of the law in that state and contains no procedural errors. This hearing also provides an opening in most states for certain individuals who have an interest in the estate to contest the will and open a separate lawsuit to convince the court that it is invalid and its terms should not be honored.
In most cases, the decedent has named his choice for executor in his will and the judge will normally appoint that individual. He’ll grant her authorization to act on behalf of the estate through “letters testamentary” or “letters of administration,” documents she can provide to various entities such as insurance companies or financial institutions to confirm that she has the legal authority to act on behalf of the estate and its beneficiaries.
After the court has officially opened the estate, the executor must identify all the decedent’s assets and gather them for safekeeping where it's feasible. This might be the case if the decedent left an extremely valuable piece of jewelry or an item of artwork. Property of this nature cannot be left untended in the decedent's home or elsewhere where a family member or anyone else might freely walk off with them.
Part of this process can be a literal hunt for assets such as bank and investment accounts or insurance policies. Did the decedent own any? The executrix will typically go over his personal papers and interview family members in an effort to track down all accounts that might exist so that she can take control of them. Did he have a safe deposit box? If family members aren't sure, she might have to contact all local banks to find out.
Some or all of these things might be mentioned in his will, but she can't simply assume that there are no other assets he acquired after he made the will or that he neglected to include for one reason or another.
When all assets have been gathered and identified, the executor must then maintain them using estate funds, such as by making sure insurance policies don’t lapse. This will require setting up an estate bank account. The decedent's personal bank accounts and cash assets are transferred into this account so that the estate can operate.
Making Notifications of the Death
The executor will make all necessary notifications of the death, including to beneficiaries named in the will if they're not already aware. This might or might not be a formal process. Some services, subscriptions, and benefits the decedent was receiving must be contacted and terminated.
The decedent's creditors must also be notified because the estate is responsible for paying his final bills and debts. The executrix must identify his creditors, often through the same methods she used to pinpoint all his assets, and send them notice that the decedent has died. Most states also require that she run a newspaper notice to ensure that any creditors she might have missed are also alerted.
Creditors can then make claims to the estate for payment. The executor decides if the claims are valid and, if so, she'll pay those debts from estate funds. She can also decline to pay certain debts if she feels they’re not valid. In many states, the creditor can then petition the court to override her decision. This usually requires that the executor or executrix appear in court again to defend her position.
Dealing With Taxes
If the estate is large enough, it might owe estate taxes. The executor is responsible for having all assets valued so it can be determined if estate taxes are due. At the federal level, the estate would have to be very large. Only those with values exceeding $11.2 million are subject to tax on the balance over this amount for deaths that occur in 2018. The threshold was $5.49 million for deaths occurring in 2017.
Fourteen states and the District of Columbia also had an estate tax as of 2017. The thresholds of some mirror federal limits for when this tax would be payable, at least as of 2017, but in some states, the cutoff is significantly less.
If the estate exceeds either or both of these values, the executor must prepare and file a federal or state estate tax return or possibly both. She might also have to prepare and file an estate income tax return if any of its assets earn income during the probate period. She will prepare and file a personal income tax return for the decedent’s final year of life.
Closing the Estate
Finally, the executor will submit an accounting to the court detailing all actions and transactions she made on behalf of the estate. If the judge approves the accounting, he will then grant her the authority to distribute the estate’s remaining funds and property to the beneficiaries named in the decedent’s will.
Is the Executor Paid for All This Work?
It's quite a job and the answer is yes. How much depends on the state in which the decedent died and where the will is being probated.
Many people include provisions for their executor's payment in the terms of their wills, and courts typically honor these provisions if they don't fly in the face of state law. If the will is silent as to payment, state law takes over and these laws can vary from jurisdiction to jurisdiction.
As a practical matter, many executors waive payment when they're closely related to the decedent and are beneficiaries in the will, particularly when the estate is not complicated. The executor's payment comes out of the estate, decreasing the amount left over for beneficiaries. And cash payments can be taxable whereas cash inheritances generally are not, at least at the federal level. In many cases, it can make more sense for the executor or executrix to forgo payment and accept a somewhat larger inheritance instead.
Every Estate Can Be Different
Not all estates require all these steps, and some particularly complicated estates might require additional work. This is a basic overview of what the job can entail. Consult with an estate attorney if someone has asked you to act as executor or executrix to find out exactly what will be required of you in your state and with that particular estate.