Executing an Estate
Duties can be time-consuming, complex, and challenging.
By David Yeske, CFP

Most people who serve as the executor of an estate consider it an honor because it usually is the estate of a spouse, relative, or close friend. But serving as an executor can be a difficult experience, frequently compounded by the executor's own grief at the death of the estate owner. Before saying yes, consider some of the responsibilities as well as the potential problems.

An executor's job is to ensure that the deceased's estate is properly settled - all debts and taxes are paid and all property is distributed according to the deceased's wishes (or in some cases, what you think were the deceased's wishes). You must act as a fiduciary; that is, you must act with utmost honesty, impartiality, and scrupulousness on behalf of the deceased and the estate's beneficiaries, which may include you.

For nearly all estates, simple or complex, small or large, you likely will have to carry out many of the following duties.

Make funeral arrangements. If this already has been done, help carry out the arrangements.

Get copies of the death certificate. Make copies as soon as possible and send them to banks or credit unions, life insurance companies, the Department of Veterans Affairs, the Social Security Administration, former employers, and others who had a financial relationship with the deceased.

Locate the will. Read it and any accompanying letter of instruction to see who is to receive estate assets.

Register the will with the probate court. Determine whether the estate needs to be probated. If there is no will, probate probably will be necessary.

Pay the necessary bills. This will help protect the estate's assets. Bills might include homeowner's insurance, mortgage and auto payments, and utility bills.

Identify the debts. Find out what is owed and settle all legitimate financial obligations.

Find all financial assets and personal possessions. Locate and inventory everything owned by the estate. This can be challenging unless the deceased kept well-organized records and provided a list to the executor. You may have to hire private investigators to track down bank accounts, stocks and bonds, mutual funds, real estate, and insurance policies. You also may need to hire professionals to appraise assets such as jewelry, a business, or real estate.

Manage the estate's assets. You may need to sell or buy assets before final disbursement of the estate to pay bills, debts, and tax obligations or to minimize potential loss in asset value because of market conditions.

Pay the taxes. You'll likely need to file an income tax return on behalf of the deceased, and you'll need to file a federal, and possibly state, estate tax return if the assets are large enough.

Distribute the estate assets. Assets like insurance proceeds and retirement accounts with named beneficiaries should be simple to distribute. The will may detail where other assets go. But conflicts often crop up here. Relatives may squabble over possessions, such as a grandfather clock or other heirlooms, that the deceased may not have directed to a particular heir. Some battles end up in court. One key, say experts, is for the executor to keep everyone informed of the progress of the estate settlement and to air potential problems before they reach a boiling point.

While these administrative details and potential conflicts can be overwhelming to executors, you do have some options. First, you can decline before you start serving (it's more difficult to quit in the middle of it), even if you agreed to serve years before. The duties then will pass to an alternate executor, if named, or the probate court will name someone.

Second, you can hire professional help. An attorney can backstop your actions by answering questions or reading through documents or even can do most of the work. A financial advisor also can work with you.