Key Executor Duties
An executor has 12 key duties when settling an estate, and each duty can require a variety of specific actions, so after reading the general descriptions, be sure to continue reading about the overall process, and the specific individual tasks. See also the overall Executor Guide.
Within the context of managing and winding down a decedent's estate, an executor has the following key duties:
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.
Collect and Inventory Estate Assets
Aside from potentially arranging the funeral, one of an executor's first duties is to collect and inventory estate assets. 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 (see Protect and Manage Assets below), 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.
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 from 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.
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.
Protect and Manage Assets
An executor must protect and manage estate assets, taking reasonable steps to minimize asset risk. For example, an executor should lock up valuables to prevent theft (or even to prevent well-meaning relatives from taking things "the decedent would have wanted them to have"). Key assets should be insured according to normal practice (e.g., homes, cars, valuable artwork). See also Secure the Assets and Protect Unoccupied Property.
Certain assets require proactive care. For example, if there is a home, you must ensure that it is reasonably maintained (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.
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 Making Distributions.
Account for Results
An executor must prepare a Final Accounting of the estate, showing assets received, income and expenses, changes in assets, and distributions. This report must usually be given to the court if the estate is undergoing probate, and often the heirs. See Wrapping it Up for more information and other closing details.
Settle the Estate in a Reasonable Time
There are few hard-and-fast rules about how quickly you must settle an estate, and while it takes 16 months on average, it is not uncommon for the process to take years (see Settlement Statistics). That being said, you do have a duty to act reasonably, and to try to finish the settlement within a reasonable time. 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.
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.
From a high-level perspective, you can visualize the process of estate settlement as follows:
You can think of probate (if required for your estate) as overlay on the diagram above, with the court providing additional rules and individual tasks for each of the depicted steps.
Settling an estate can be complex, and fulfilling each primary duty can require a significant number of individual tasks. These individual tasks often depend on estate particulars, and while some tasks should simply be done when possible and convenient, others have strict deadlines (calculated from the date of death, from the date of other task completions, or even just in terms of calendar year dates).
As a result, while the diagram above looks fairly straightforward, in practice you will find that there is not a simple 1... 2... 3... set of steps you can follow in strict sequential order. Often you will work on one task, work on another, return to the first to do more work, and so on. Consequently, it is very important to stay organized, understand timeline requirements, and keep good track of what you have done, and what remains to be done.
EstateExec provides high-level guidance for the overall executor process via an estate's Task Tab (see Sample Estate Tasks). EstateExec automatically adds or removes tasks based upon particulars of the estate, such as state of residence and year of death, and the details of an estate task can vary significantly based on estate particulars.
Some tasks describe fairly general yet important steps. Others include links to required forms, perform financial calculations, provide optional discounts on related third-party services, and give additional detailed assistance.
The automated EstateExec Task checklist is useful, but it is not intended to be an exhaustive list, and you should keep in mind that the majority of EstateExec's long-term utility also lies in its ability to track and manage assets, debts, and cash, and to optionally share that information with heirs.