The executor of an estate, also referred to as the personal representative of the estate, is chosen by the testator or creator of the last will and testament. The chosen individual is responsible for a wide number of services for which he is typically paid a fee or given a bequest in lieu of a fee. If a fee is involved, it is typically determined by the laws of the state of residence of the testator, the testator’s decision, or a decision made by the beneficiaries of the estate.
The services that the executor must perform will involve both the assets and the debts of the estate. The responsibilities of the executor are serious and time consuming in many cases. This selection should be given a great deal of thought since the best interests of the heirs should be protected.
If the testator is using an estate planner or an estate planning attorney, together they should be able to determine the proper candidate for the job. In addition to filing each of the required documents with the appropriate probate court in a reasonable timeframe, the personal representative of the estate must also complete several other tasks, each of which is explained below.
Services Related to the Assets of the Estate
The executor must determine what the assets of the estate are. He is also responsible for protecting the assets until probate has been completed. In some cases, he might be responsible to invest the assets of the estate until that time when they will be dispersed among the beneficiaries of the estate. He is also responsible for distributing the estate assets to those who are to receive them.
The values of all assets including real estate and business interests that will be subject to probate must be determined. Therefore, the personal representative must obtain appraisals of each item. This is often referred to as obtaining the date-of-death values.
The date-of-death values of any non-probate items must also be determined if the estate is taxable. This will include any business interests or real estate.
Services Related to the Debts of the Estate
The executor is required to determine what debts relating to the estate are owed as well as whom they are owed to. He is then responsible for making the payments on each of the debts that have been accrued by the testator. This includes all of the preparation that is involved in determining the debts owed as well as the exact amounts.
Any debts or payments that are due for the estate must be paid by the executor even if he must incur out-of-pocket costs. In many cases, the assets of the estate are not available to pay these expenses and so, the executor must find a way to raise the cash in order to pay off these debts. These costs will be repaid from the assets of the estate.
In some cases, these expenses will be ongoing until the probate of the estate is closed. It is the responsibility of the executor of the estate to identify which expenses will be ongoing ones so that they will be paid in a timely fashion. Administrative expenses are one example of an ongoing expense.
The personal representative will need to asses the value of any liabilities associated with the income or estate taxes. All required income tax and estate tax forms will need to be completed and filed by the executor of the estate. This activity will include assembling all of the necessary papers together.
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