The executor’s role is to ensure that the terms of a persons will are followed or if no will exists to ensure the estate is transferred in compliance with state law. There are several steps in this process.
- Identify the assets.
- Collect or otherwise take control of the assets.
- Identify the debts.
- Pay debts.
- Distribute any remaining assets.
Identifying the assets is essentially determining what is owned and making a list of those items. This will include property, personal possessions, cars, investments and cash. Identifying the assets will also require a general determination of value. For example, a Monet painting will be handled differently than a painting by an unknown artist.
Collecting or taking control of assets will mean a variety of things. Anyone holding an investment or financial account will need to be notified of the death and the name of the executor. Real property such as the home of the deceased will need to be identified and secured. However, if the intended beneficiary is occupying the home physical possession may not be necessary.
Identifying the debts is a two step process. You must first determine who is owed money then you must classify the debts so that they will be paid in the correct order. The state has provided categories to classify debt.
Debts are paid in the order or priority mandated by the State. In some cases the estate may be unable to pay all the debts. If there are not sufficient assets the executor begins paying those debts with the highest priority and continues until as many debts as possible are paid.
Once the debts are paid the executor must distribute any remaining property. If there is a will the executor must distribute the estate according to its terms. If there is no will the state provides guidelines for distribution of the remaining property.
The executor plays a very important role and should be selected with care. You obviously want someone trustworthy. You will also need to consider the nature of your estate. If you have complex business or financial issues that the executor must deal with you need to appoint a person who is competent to handle those issues. The executor is often a family member or close friend but large estates are sometimes managed by a corporate executor.