Church Executive SEPT / OCT 2019 DIGITAL ISSUE | Page 19

A
n executor is the person responsible for managing
the administration of a deceased individual’s estate.
Being named an executor is not a task to be taken
lightly; it might involve a lot of time and effort, depending on
the size of the estate.
Even if the estate is small, there are still important duties
that must be carried out correctly, such as settling of the
estate, paying any debts or taxes on behalf of the estate, and
making sure that the people named in the will receive their
inheritances. Your chief responsibility is to ensure that the
instructions in the will are properly followed.
The average estate administration takes one year;
however, you might not need to work full time on it
depending upon the complexity of the estate.
Here are some of the specific tasks that must be completed.
Locate important documents required to settle the estate
If there is a will and you don’t have it or it hasn’t been
brought to court, you might need to find it among the
deceased’s belongings. If you only have a copy of the will,
you might need to obtain the original from the attorney
who drafted it.
As the executor, you’ll also need to obtain the original
or a certified copy of the death certificate. Note that you
might need several original or certified copies for various
institutions such as banks, investment firms, life insurers,
the U.S. Department of Veterans Affairs, and the Social
Security Administration. Most states charge a fee for the
original death certificate as well as for certified copies.
Consider hiring an attorney
You aren’t required to do so, but mistakes can be costly.
The executor might be personally liable if an error is made
with the estate or payment of taxes. Your state may have
its own estate tax and income tax requirements for estates.
An attorney experienced in estate planning can provide
guidance and ensure that deadlines are met.
Apply for probate
The executor must file the will with the probate court
and receive letters of testamentary. A letter of testamentary
is a legal document issued by a probate court that gives an
executor the power to act in a fiduciary manner on behalf of
the estate. A key task for the executor is presenting the letter
of testamentary along with the death certificate in order to
handle estate business and show that you have the authority
to act on the estate's behalf. If there’s no will, you receive letters
of administration providing legal authority to act on behalf of
the estate. This officially begins your work as executor.
Set up a bank account
The executor is required to keep the estate’s money
separate from their own. This account will be used for any
money that is owed to the deceased and delivered after
death, such as final paychecks, stock dividends, or payment
of debts owed to the deceased. It will also be used to pay any
ongoing expenses such as utilities, mortgage payments or
insurance premiums.
Notify all interested parties
You will need to notify the beneficiaries of the will as
well as any potential heirs such as children, siblings or
parents who might or might not have been named in the
will. This can be one of the most difficult aspects of your
job because of the mixed emotions concerning a person’s
death and the internal family dynamics which you might
or might not be aware of.
You will also need to place an advertisement for potential
creditors in the local newspaper.
In addition, as the executor, you are responsible for
canceling or closing accounts and credit cards that are
still open. If the deceased was receiving Social Security
benefits, the Social Security Administration needs to be
notified as well.
Manage the deceased’s property
You will need to take inventory of the deceased assets and
liabilities. As executor, you might want to enlist the help of a
neutral third party to avoid potential disagreements among
family members or other heirs. Another responsibility
of the executor is to protect any property from loss, so
you might need to change the locks on real property or
secure heirlooms until they are distributed or sold. In
addition, some property may require an appraisal in order
to determine the value for tax purposes.
Pay debts and taxes
Once creditors have been determined, the executor must
pay the deceased’s debts from the estate funds. The estate
usually pays any reasonable funeral expenses first. Other
debts might include probate and administration fees as well
as any valid claims filed by creditors. Tax returns must be
filed within the time frame required by law. Taxes due will
include estate taxes and income taxes.
Distribute assets and property to beneficiaries
After the estate debts and taxes are paid, the executor is
responsible for making sure the beneficiaries receive what
they are entitled to according to the will. You might be
required to sell property to fulfill legacies in a will. You might
also be obligated to set up any trusts required by the will.
Retain accurate records
It’s extremely important for the executor to keep accurate
records of everything you do regarding the estate. You will
have to create a final accounting, which the beneficiaries
must review before the distribution of the estate can be
finalized. This accounting should include any distributions
and expenses as well as any income earned by the estate.
File the final accounting with court
After the final accounting has been approved by the
beneficiaries and the court, the court will close the estate.
Serving as an executor can involve a lot of work and
requires you to recognize the responsibility which has been
entrusted to you. However, you’re entitled to compensation
for your services subject to approval of the court. Remember
that any compensation you receive is considered income, so
you will need to declare it on your tax return.
Matthew D. Hoffman, CFP ® , ChFC ® is Chief Client Services
Officer and is also an officer of MMBB [www.mmbb.org] serving as
Corporate Secretary. Matthew Hoffman has worked extensively in
the financial services industry. Prior to joining MMBB, Hoffman was
a vice president at JPMorgan Chase and a financial advisor in the
private client group at Merrill Lynch.
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