Being the executor of an estate comes with many duties and responsibilities. You’ll find the basics below so you can have an idea of what you can expect before you accept the role of an executor.
Being selected as the executor of an estate is often an honor, but it’s also a legal obligation. So before just saying “yes” to the job – and it is technically a job – you need to understand what you’ll be dealing with. In general, you will need to distribute the testator’s property and handle all the necessary estate expenses and debts. Fortunately, you can always reach out to an attorney for help or even have a lawyer take the entire matter for you.
What You Need to do as an Executor
Before you decide to accept the role of an executor, consider the following tasks that you’ll be expected to do:
- Locate the will (if applicable), make a copy of it, and file it with your local probate court.
- Inform all relevant government agencies, banks, and credit card agencies of the testator’s death.
- Figure out if probate is needed.
- Represent the estate in all court proceedings.
- Open a bank account dedicated to incoming estate funds and paying off ongoing bills.
- Make an inventory of all assets included in the estate and file it with the court.
- Maintain properties until they can be sold or distributed. You’ll also be responsible for selling properties.
- Pay off all taxes and debts on the estate.
- Distribute estate assets.
Because estates differ significantly in complexity and size, the executor’s responsibilities might be easier or more challenging to carry out and involve other tasks beyond those listed above.
What You Should Consider Before being an Executor
The difficulty or ease of serving as an estate’s executor will be dependent on many different factors, including the following:
The Job’s Complexity
Larger estates with substantial property, assets, possessions, and multiple beneficiaries will be more time-consuming and challenging to manage. This is the main reason why testators with sizeable estates typically hire professionals to create their estate plan and help them execute it when the time comes.
On the other hand, if the testator left an estate with no potential tax issues and property or assets with fair value, the duties attached to the estate may be easily manageable. Likewise, if you personally or intimately know the testator, managing their affairs once they pass away may not be so challenging. However, suppose you are not familiar with the testator’s affairs. In that case, you may have to handle legal and practical problems, including locating the will, working with insurance companies, managing investments, and dealing with unknown beneficiaries. Additionally, the probate laws in your state may also come into play. Unfortunately, while the probate system was developed to make estate management more accessible, it can sometimes do the opposite and complicate matters.
Besides the practical and legal considerations above, the following factors may also significantly impact your decision:
• Will you have enough funds to manage the estate if you’ll need to take significant time off work to carry out your responsibilities as an executor? Do you even have the time?
• Will you be paid for your services?
• Are you familiar with the testator’s family members or beneficiaries? Will there be pushback or conflict?
• Are you willing to work with a co-executor if you’re required to do so?
Considering these personal factors could help you make a decision, prepare yourself for potential issues, and help you come up with sound solutions to the problems you might face as an executor.
Compensation for Executor Duties
State law determines how executors are compensated for their services. Payment can be hourly, a portion of the estate, or a flat fee. In some cases, the probate court judge determines the payment. But testators can also include how they want to compensate the executor, which may supersede applicable state rules. Aside from the regular payment, you may also be given extra payments if managing the estate involves more work than usual, like managing litigation or selling personal property for the estate. You may also receive payment for expenses you incurred while carrying out your executor duties.
You can receive compensation from the estate once all bills and debts are settled and before you distribute money to the beneficiaries. It’s immensely vital to get a clear idea of how you’ll be paid, especially if being an executor would require a lot of your time and prevent you from doing your regular work. Remember that the compensation is considered income, so it is taxable.
An Important Note on Personal Liability as an Executor
You could be held liable for any mismanagement issues or mistakes when managing an estate. Common errors and problems include failing to file tax returns on time or not paying taxes, self-dealing, inappropriate investment decisions, or allowing casualty or property insurance to lapse, causing a loss for the estate.
To help prevent this, your best recourse is to seek expert professional advice from a competent Virginia estate planning lawyer once you decide to take on the role of an executor. You should also communicate with all beneficiaries regularly, treat all your duties, communications, and interactions as formally as possible as if you weren’t related to the beneficiaries and/or testator, even if you are, and document all your decisions and actions.
We Can Help You Decide. Speak to a Virginia Estate Planning Attorney Today
If you’re having any doubts about your ability to serve as an executor, consult with an estate planning attorney in Virginia as soon as you can. You can ask all the questions you need to be answered before deciding whether or not to accept the executorship, so you can weigh all the pros and cons of refusing or accepting the role before making a decision.
Contact the McClanahan Powers law firm in Virginia at 703-520-1326 or use our online contact form to reach us. We’ll tell you all you need to know about being an executor of an estate in Virginia and help you make a decision that will be best for you.