An estate executor, or personal representative, is an individual or entity named in a will to execute, or carry out, a person's wishes after his death. This includes paying bills and dispersing funds in a prespecified way for specific estate-related expenses. It does not allow for personal use of estate funds. An estate planning attorney can be a helpful resource for those unfamiliar with the responsibilities of an estate executor.
Role of the Executor
An executor reviews the will or trust of the deceased, offers the will for review by a probate judge and receives letters testamentary that authorize him to carry out the wishes of the estate. If the deceased has a living trust in place, in which assets are transferred to the trust before death, probate may be skipped and the directives of the will can be carried out without court intervention. The executor is also responsible for notifying the U.S. Social Security Administration, the Department of Veterans Affairs, health-care providers, insurers and other entities of the death.
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The executor is responsible for protecting the assets of the estate, both physical and financial. For example, the executor must make sure tangible property like real estate and personal possessions stay in good condition and are appraised and liquidated, if necessary. An executor may also be charged with managing existing estate investments until assets can be distributed to beneficiaries. The executor is responsible for locating and closing financial accounts, canceling government benefits and filing a last tax return on behalf of the deceased. In addition, the executor is charged with paying taxes and debts of the estate before monetary gifts are distributed to named beneficiaries.
An executor opens a bank account for the estate and places all financial assets there until they can be distributed. Paying for funeral and burial expenses using estate funds is considered an acceptable expenditure the executor is authorized to make. This can include funeral services, a casket or urn, cremation services, interment or burial plot. The executor may also use estate funds to pay costs such as mortgage, insurance and utility bills associated with the deceased's property while the estate is being processed.
Mismanagement of Estate
Some expenditures and financial decisions can be made at the discretion of the executor, while others are dictated by the will. For example, the executor may decide how much to spend on a memorial service or how to manage a particular investment. If the executor mismanages estate funds, such as poorly handling money or allowing property to fall into disrepair, he can be held personally responsible for losses incurred to beneficiaries. Beneficiaries would have to prove negligent behavior and demonstrate how their inheritance was negatively impacted by the executor's actions. The responsibilities of the role can be cumbersome; a person named as an executor can decline the role if he believes it is too burdensome or complex to assume.
Some estates are financially complex; in some circumstances, the executor may use all estate proceeds to meet the deceased's pre-existing financial obligations. If costs exceed the estate's value, the executor and heirs are not responsible for paying the overage.