Many of us do not like thinking about the things that could happen when we pass away. Even so, it is important to make decisions such as choosing an executor of an estate so you can be confident that your loved ones will be cared for no matter what happens to you.
If you are only starting estate planning now, you may not know much about the role played by the executor of an estate. That is understandable, but you also need to work on changing that now.
Continue with this article if you wish to learn more about the different responsibilities that an executor of an estate must fulfill. By the end of this article, you should also have a clear idea of which person in your life should have that role.
What Is an Executor of Estate?
Let’s start by clearly defining what an executor of an estate is.
In New York State, the property of a deceased individual must be divided among heirs. The person in charge of doing that is known by different terms.
If the deceased person left no will behind, they distribute their possessions via an administration proceeding. An administrator will helm the proceedings. The administrator is often the closest relative of the person who died.
A voluntary administration manages the small estate (an accumulation of assets valued at less than $50,000). The person who leads the voluntary administration of a small estate is the ‘voluntary administrator’. A voluntary administrator could either be in a will or be the closest remaining relative of the deceased individual.
Wills are handled through the probate process. Since there is a will available, the surrogate’s court will examine it to determine who is the executor of the deceased’s estate. Similar to the administrator and the voluntary administrator, the executor of an estate will be in charge of distributing the decedent’s assets.
Who Can Serve as the Executor of an Estate?
The executor of your estate cannot be anyone. They must meet certain requirements if you want the state of New York to recognize them.
Let’s go over the qualifications that an executor of an estate must possess in the section below.
At Least Eighteen Years Old
A responsible adult must handle the role of an executor. That is why New York requires all executors to be at least eighteen years of age.
Possess a Sound Mind
Executors should also have a sound mind if they wish to handle the responsibilities of that role. The court will be the one to decide if the person named as the executor of an estate is of sound mind.
Must Have No Felony Convictions
A convicted felon will not be allowed to serve as an executor of an estate in New York. Keep that in mind while you are writing your will.
US or New York State Citizen
The citizenship of your chosen executor will also determine if the court will recognize them or not. The executor you name should be a US citizen or someone who lives in New York State if they are not a US citizen.
If you want to push through with naming an executor who does not fit either criterion, you will need to designate a co-executor. The co-executor must be a resident of New York.
Additional Rules for Executors in New York State
Apart from all the qualifications that we have already listed, there are additional requirements that executors must meet.
The surrogate’s court could decide that a person is unfit to serve as the executor of an estate based on substance abuse or dishonesty. They may also disqualify certain individuals because of concerns the court has over how they will handle the money in the estate. A person may not be recognized as an executor if the court finds that they do not understand the role sufficiently.
What Are the Responsibilities of an Executor of Estate?
Now that we know who an executor of the estate is, we can shift our attention to understanding their responsibilities. The role of executor is not one to be taken lightly. It includes a lot of responsibilities that can be complex.
An executor of an estate can hire a lawyer to ease their burden. They can also learn more about everything their role entails by reading on.
Executors Have a Fiduciary Duty to the Decedent’s Estate
If you are the executor, it is important to remember that you have a fiduciary duty to that estate. What does being a fiduciary mean, you ask?
In essence, a fiduciary must act based on the best interests of the party they are representing. They must act in good faith and consistently put the best interests of the estate ahead of their own.
Fiduciaries are not only bound by their morality to serve the estate properly. That duty is also the law.
If you fail to fulfill your fiduciary duties to the estate, you will be held accountable in court.
Still, there are no guarantees that an executor will act correctly simply because of their fiduciary duties. To protect against potential improprieties, the court may bond the executor; the bond effectively shields the estate from any irresponsible actions carried out by the executor.
You must be willing to agree to the terms of that bond if you wish to carry on in that role.
Executors Must Put the Will through Probate
You cannot distribute the assets of an estate until the court validates the will. The process of determining the legitimacy of a will is known as probate. As the executor of the estate, it is your responsibility to put the will through that process.
Executors must file the will, the decedent’s death certificate, and the probate petition with the court to start probate. The courts may also ask the executor to provide supporting documents.
Filings can be done online, or you can also complete them in person at the surrogate’s court. You must file them in the surrogate’s court that has jurisdiction over the decedent’s primary residence.
The probate process is fairly straightforward, but it can be confusing if you are going through it for the first time. If you need help navigating the process or securing documents, remember that you can always hire a probate lawyer.
Seize Control of the Decedent’s Assets
Unlike the executor, the laws do not bind the heirs of an estate to act in the best interests of any other party. If they want to look out for themselves, that is their prerogative. Unfortunately, some heirs may try to take ownership of assets that you have not distributed yet.
The executor of an estate cannot allow that to happen. They must seize control of the assets so they are not handled or distributed improperly.
Executors often need to seek out a lot of assets. They will need to take control of the decedent’s bank accounts, obtain keys to houses, and secure any other properties that they will distribute.
This process can be time-consuming, so make sure you are ready if you are the person who is the intended executor.
Take Inventory of the Decedent’s Assets
Once you have seized control of all the decedent’s assets, the next item on your to-do list is taking inventory.
The will may list all the assets included in the decedent’s estate. Use that as a reference as you note the assets that are already in your possession.
Hopefully, the assets you have gathered will line up with the contents of the will. If that is not the case, you may need to continue seeking out assets.
Appraise the Decedent’s Assets
After collecting and taking inventory of the decedent’s estate, your next task as the executor is to appraise the available assets. Why is appraising the value of the assets important?
First off, knowing the value of the assets could prove helpful for settling the affairs of the estate. If there are still outstanding debts, you can use the assets to pay them. You will know if you are paying the right price by getting the assets appraised first.
Appraisal also helps with the distribution of the assets based on how the will is worded.
Pay Estate Taxes
Now we are getting to the tasks that are related to settling the affairs of the estate. It starts with paying estate taxes. You must pay the estate taxes before distributing assets. Do not forget about this part of the process.
You must work quickly to pay those taxes. The state of New York requires executors to pay the estate tax and file with the tax department within nine months of the decedent’s death. That time can go by fast, so make sure you work on those things as soon as possible.
The state may levy penalties upon late estate tax payments. If you do not think you can pay the estate taxes on time, you can ask the state for an extension.
Settle the Estate’s Debts
Your loved one may have left some debts when they passed away. Those debts do not go away simply because the person who owed them has died. You must still settle them properly using the estate’s assets.
Examples of debts you must pay before distributing assets include loans and outstanding bills. Some creditors may also file claims against the estate over previous debts. If those claims are legitimate, the estate will need to pay for them, as well.
Do not forget about any payments you still need to make to the funeral and cremation services. You can also pay administrative fees for managing the estate using available assets.
You will continue to pay debts until they are completely cleared.
Distribute the Assets in the Estate
With the taxes paid and the debts settled, the executor can now start distributing the assets of the estate. The executor of the estate is not the one who will determine how to divide the assets among the heirs. Their job is simply to distribute assets according to the decedent’s wishes.
Sometimes, issues arise during the distribution process because the heirs complain that they are not receiving their fair share. They may even point to the will as proof that they have not received enough of the decedent’s assets.
If the heirs are not receiving their share because the estate’s assets have been depleted after paying the taxes and debts, then the executor has nothing to worry about. They can contact a lawyer and prove that they have managed the estate properly.
Detail How the Estate’s Assets Were Used and Distributed
The executor’s duties are not done even after distributing the assets. Before they can say they finished their work, they must first detail how they used the estate’s assets for the beneficiaries.
Doing this is necessary so the heirs have no lingering doubts about potential improprieties. This is also one way for the heirs to know if the executor was truly working in the best interests of the estate.
Follow the Orders of the Surrogate’s Court
One last thing executors should know is that the surrogate’s court may hand down orders related to the estate during the entire process. The executor cannot ignore those orders. They must listen and fulfill them as they would the orders in the will.
An executor who fails to follow the court’s orders may be suspended. That duty may also be stripped from them by the court.
An executor of an estate has a lot of responsibilities to manage. If you were the chosen executor and you are having some trouble, do not shy away from seeking help. You may also need help with general estate planning.
Contact us at the Alber Law Group and we will help you through the different stages of estate management. We are always ready to provide assistance so please do not hesitate to reach out.
