What Does An Estate Executor Do?

What Does An Estate Executor Do?

By Bill Bischoff    Last Updated: Oct. 4, 2021

Here’s a checklist of the most important financial duties

There are plenty of tax questions when a loved one passes away, but what other financial issues could arise? Tax Guy walks you through them.  When a loved one who was financially comfortable passes away, there will most likely be tax issues. You may be the heir responsible for dealing with them, and major bucks could be in play. In three earlier columns, I explored the potential tax considerations. See here, here and here.

This column addresses some other important financial issues. Here goes.

What Is The Role Of The Executor?

When a loved one (the decedent) passes away, someone must take on the job of winding up the financial aspects of the estate. That person may be identified in the decedent’s will as the executor of the decedent’s estate.

If a family trust holds the decedent’s assets, the trust document will designate a trustee. If there’s no will or trust, the probate court will appoint an administrator. In any of these scenarios, we will call that person the executor to keep things simple. That person might be you. If so, please read this.   

The executor’s assignment is financial in nature: identify the estate’s assets, pay off the debts, and distribute the remainder to the rightful heirs and beneficiaries. The executor is also responsible for filing tax returns and paying tax liabilities. 

As the executor, you may feel morally obligated to do much more. We will talk about what “much more” can include.   

Do You Need A Professional Executor?

Maybe. If the decedent was wealthy with complicated financial affairs, hiring a professional executor might be a good idea for that reason alone. It takes some of the heat off you.

Another situation where a professional executor might be advisable is warring or just-plain-unreasonable heirs. This is not unusual in families of means. For instance, one heir who has basically been living off the grid in New Mexico for the last 20 years might think the family homestead that will soon be put on the market is worth $10 million. The other heirs, who are much closer to the action, know it’s not worth over $5 million. The off-the-grid guy thinks he’s getting shortchanged and is threatening to sue everybody and their brother. Literally. Or a financially challenged heir may be demanding his or her share “in cash right now” even though that’s impossible. A professional executor can quash such nonsense without you getting dragged into the muck. A good estate planning attorney can recommend a good professional executor. 

Whether you hire a professional executor or not, you may feel morally obligated to handle many things yourself.

To continue reading, please go to the original article here:
https://www.marketwatch.com/story/what-does-an-estate-executor-do-heres-a-checklist-of-the-most-important-financial-duties-11633121701?siteid=yhoof2