Key Executor Duties

Arrange Funeral

Although not legally required to do so, executors commonly take the lead in managing any funeral. Funeral expenses can be paid or reimbursed from the estate, and a "standard" funeral, including a casket, will probably cost around $6-10K (plus any burial costs, which can be substantial) ... with the caveat that funeral costs vary significantly by region and by service choices. See Funerals for more information.

Inventory Estate Assets and Debts

Aside from potentially arranging the funeral, one of an executor's first duties is to inventory the estate (i.e., make a list of all estate assets and debts).

Discovering all assets in an estate can be more challenging than you would think, even if the decedent left a seemingly organized list. Over time you may receive account statements in the mail regarding previously unknown assets, and you may discover additional assets by asking the decedent's lawyer or tax accountant, by perusing the decedent's recent income tax forms, or even performing online searches for life insurance policies, abandoned assets, retirement plans, and more: see Finding Assets for helpful information.

Part of the inventory process is to determine the value of the assets so that taxes can properly be assessed, and so that distributions can be appropriately allocated. Certain types of assets are easy to value, such as the contents of a bank account or shares of stock in a publicly traded company. Other asset types can be a little less definitive, such as a used car or collectible, which you can estimate using public references, or real estate, where you may want to look at the tax assessor's valuation and talk to a real estate agent about sales of comparable properties. Still other asset types can be downright difficult to value, such as artwork or a private business, for which you likely need hire a professional appraiser. See Determining Value.

Tip: Since an executor has a duty to protect estate assets, as you conduct this inventory you may want to ensure that the assets are safe, keeping in mind that there are limits to your early authority (see Taking the Reins).

Manage Estate Financial Activity

At all stages of estate settlement, you must supervise and carefully track estate financial activity: expenses, income, asset sales, debt payments, distributions and more. In fact, these responsibilities extend beyond the just asset collection and management: you are also responsible for ensuring estate debts are resolved, and that any relevant tax returns for the estate have been filed (as well as the decedent's final tax returns). Depending on the settlement process used, you may need to see approval from the court for certain actions, but ultimately, you are responsible for all aspects of the estate. See Estate Financials for details.

Initiate Probate (If Required)

Probate is the court-supervised process of administering and settling a decedent's estate ... and how one obtains an official appointment as executor. Not all estates need court involvement, and EstateExec can help you figure out the requirements for your estate (see Is Probate Required?).

In general, an estate will have to go through probate unless it contains only assets that automatically transfer to named beneficiaries (such as IRAs), or if the estate qualifies to use one of the state-specific small estate procedures.

You will need to have at least an early understanding of the estate inventory in order to determine whether probate is necessary, and if so, many states require you to submit an initial inventory with your probate application (or at least have an initial estimate of estate value). Don't worry – it's common to have to revise this inventory later on as more information becomes available.

Protect and Manage Assets

An executor must protect and manage estate assets, taking reasonable steps to minimize asset risk. This may mean taking physical possession of tangible assets such as jewelry, cars, and homes, as well as gaining legal control over financial assets such as bank accounts and stock portfolios. The sooner you can do this the better, but assets held by other custodians (such as a financial institution) will usually require you to first be appointed executor by the probate court, which can take several weeks.

Key assets should be insured according to normal practice (e.g., homes, cars, valuable artwork), and certain assets require proactive care. For example, if there is a home, you must ensure that it is reasonably maintained (e.g., protecting it from fire hazard, damage due to a leaky roof, or even vandals attracted by an obviously abandoned property). If there is a business, you must ensure that it continues to operate (assuming it was not something that depended on the solo efforts of the decedent), possibly managing the business yourself, or hiring a professional manager. See also Protect Unoccupied Property.

While there are many types of assets, each with their own needs, it's worth mentioning investments in particular. On the one hand, there is a degree of risk associated with any investment, and you have a duty to protect assets against loss (including reduction in value). If the decedent owned some particularly risky stocks, you may want to consider trading out of them into something considered "safe". On the other hand, putting all the investments into cash would mean that the assets would not only "lose value" over time due to inflation, but would fail to grow as expected. As an executor, you need to follow a reasonably safe, prudent investment course. You are not asked to produce exceptional investment returns, but you should aim for and accomplish reasonable returns (with a preference for safety). If you are not an experienced investor, you may wish to consider obtaining professional advice.

Notify Required Parties

There are number of people and organizations you will want to notify about the death, and some of these notifications are time-sensitive. For example, you will usually need to notify various government agencies (e.g., the IRS, the Social Security Administration, the DMV, post office), heirs and heirs-at-law, creditors, life insurance companies, utility companies and other service providers, and more. See Notifications for a general list, and if you are using the EstateExec software, it will show the specific notification tasks and due dates on the estate's Tasks tab.

Pay Required Taxes

As an executor, you are responsible for ensuring the estate pays all required taxes, including income taxes for the decedent (for the last year of life, plus any previously unresolved years), income taxes for the estate during the period of estate settlement, plus any applicable federal estate taxes, state estate taxes, and state inheritance taxes. In addition, you must continue to pay any local property taxes for property contained within the estate. Note that federal and state taxes have priority over most other claims on the estate, including standard debts. See Paying Taxes for more details.

Resolve Estate Debts

Before making any distributions, you should resolve all estate debts (which may mean paying them off, or negotiating to get them forgiven). You can be held personally liable for estate debts if you make distributions and the estate cannot subsequently pay all its debts, even if the debts were unknown at the time, so it's important to do things in the proper sequence, and to properly notify creditors. See Finding Debts and Resolving Debts.

Distribute Net Assets to the Rightful Heirs

Once you have handled all other estate obligations, you must distribute the remaining assets to the rightful heirs (whether those named in a will, or if there is no will, those entitled to inherit via the state rules of intestate succession). Family Entitlements are an exception to this rule, and have precedence over most other estate obligations, so should often be handled earlier in the process. See Determining Heirs and Making Distributions.

Report Final Accounting

At the end of the estate settlement process, you will normally have to generate an estate accounting that details all financial activity during your stewardship of the estate. This accounting should show the estate inventory at the time of death, all financial events during your management of the settlement process, and ultimately the distribution of the final net estate. Depending on the details of the estate and the settlement process, you may be required to deliver this accounting report to the court and/or the heirs (if the settlement process takes multiple years, you may also have to deliver annual reports as well). See Final Accounting.

Settle the Estate in a Reasonable Time

While a few states specify target timeframes for settling an estate, most jurisdictions simply require executors to finish the process within a reasonable time. It takes 16 months on average to finish a settlement, and it is not uncommon for the process to take years (see Settlement Statistics), but be aware that disgruntled heirs or creditors can petition the court to have you removed if it is perceived that you are not acting in a timely manner (see Failing to Act). For information about finalizing an estate settlement, see Wrapping it Up.

Act in the Best Interests of the Estate

In serving as an executor, you must always act in the best interests of the estate ... even if that is not always in your own best interests. You will likely face numerous decisions that have no clearly "correct" answer, and you will have to use your judgment, even on occasion making decisions based solely on your preferences, which is fine, as long as your choices don't harm the estate (for example, you cannot sell something at below-market prices to a friend). See Fiduciary Duty.

Follow the Law, and Act Ethically

Last but certainly not least, in all cases you must follow the law, and act with the highest ethical standards. While your specific tasks may sound straightforward, there may be a number of laws or expected practices that apply to a given duty, as well as situations that require individual judgement. As an executor, you are not required to achieve perfect results, but you are required to follow the standard of a "reasonable, prudent individual", and it's a good idea to keep excellent records of all your actions, particularly with respect to financial transactions. You may also want to consider obtaining professional assistance for subjects you may not know well (such as real estate valuation, complex investments, etc.). See Fiduciary Duty.