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Marc A. Hebert's Money Sense: Being an executor requires honesty, responsibility - and a little help

By MARC A. HEBERT
June 02. 2018 5:19PM




Usually a person feels honored and trusted when asked to be the executor of a family member's estate.

It's a big responsibility, as the executor will be carrying out a person's final wishes. If you are asked to be one, it is a good idea to know some of the duties it entails before taking on the task.

By definition, an executor is the person named to distribute a deceased person's property that passes under his or her will and arranges for the payment of debts and expenses.

If the executor is not willing or able to perform his or her duties, there is usually an alternative. If there is no alternative, then it is up to the courts to approve an executor for the estate.

Depending on the estate, it can be a difficult and time-consuming task to settle. Each state has its own rules.

In some cases, the deceased may have left a letter of instruction making the process easier. The letter could contain a list of documents and their locations; contacts for attorneys, accountants, and financial planners; names of creditors; login information for important websites; and final burial wishes.

Also found among the documents is usually a will. The executor will need to secure a copy, read and understand the contents. Discussion with an estate planning attorney is also needed to decide which type of probating (a process of getting a court to approve the validity of the will) is necessary.

An inventory of assets that the deceased owned is taken by the executor and may be required by the probate court. Assets may need to be appraised. If the deceased had a safe deposit box, the contents need to be secured. Once the probate process is finished, assets then may be sold or given as gifts according to the deceased's wishes.

Asset protection is a top priority during this time. This could include changing locks on property. The executor may pay mortgages, utility, and maintenance costs on property. The executor will need to change the name of the insurance on home and auto policies. Brokerage accounts will need to be retitled.

Final expenses also need to be paid. The funeral home or coroner will provide death certificates that will be needed later on. For example, when presenting the will to the court for the probate process, a death certificate is presented as well.The filing of life insurance claims is another example in which a death certificate will be necessary.

Other debts and taxes will require payment. Medical bills, credit card debt, and taxes should be paid out of the estate. The executor and/or heirs are typically not personally responsible for the debts of the deceased that exceed the value of the estate.

If the deceased was collecting benefits (Social Security, for example) the agency will need to know of the passing so benefit checks can be stopped. Any checks received after death will need to be returned.

As the saying goes, two things are certain in life: death and taxes. A final federal and state tax return for the deceased may need to be filed. An estate and gift tax return may also be necessary.

As can been seen, an executor has lots of duties. There is the need for the person to be honest, impartial, and financially responsible. Estate assets need to be managed properly. The term for this in the law is a "fiduciary duty".

All of these steps can be made easier with the advice and guidance of a competent estate planning attorney. Consulting with an attorney is generally the best way to make sure there is compliance with all executor duties.

Marc A. Hebert, M.S., CFP, is a senior member and president of the wealth management and financial planning firm The Harbor Group of Bedford. Email questions to Marc at mhebert@harborgroup.com. Your question and his response might appear in a future column.


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