When you pass away, your estate must be administered, regardless of whether you have a will or not. The person or company who is responsible for managing the administration of your estate is called an “executor” (male), “executrix” (female), or in estates without wills “administrator” and “administratrix.” Today, those terms are often merged for the single term, “personal representative.” Since most people are familiar with the it, we will use the term “executor” in this article to incorporate all the other terms. An executor does not have to be an actual “person,” but can also be an institution such as a financial institution. Each state has its own qualifications or requirements for an executor. In most states, minors, certain convicted felons and non-citizens are not qualified. In Nevada, if you are not a resident of the state but you were named as executor of a will probated in Nevada, you can serve as executor. However, if there is no will and you are a non-resident executor, you need to associate with a Nevada resident as co-administrator.
What are an executor’s duties?
The full extent of the duties required of an executor depend on the type of estate being probated. Here are some of the common duties that an executor may be called upon to perform:
- Apply for probate. Applying for probate with the court by filing a petition officially begins the role of executor. The executor will receive letters testamentary if there is a will, or letters of administration, if there was no will.
- Hire an attorney. Though it is not required, it is generally in your best interest to hire an attorney. Mistakes can be costly, not to mention the fact that you may be held personally liable if something goes wrong during the administration of the estate.
- Locate documents. An executor is responsible for obtaining a copy of the death certificate and locating the will, if there is one. Any other important documents, which take effect upon the individual’s death must also be located.
- Manage the deceased’s property. It is also the executor’s duty to protect the decedent’s assets from loss. So, one of the most important responsibilities in managing the estate is creating an inventory of assets and identifying liabilities.
- Pay valid claims by creditors. In most cases, funeral expenses, probate and administration fees, taxes and other fees are paid first. Once all of the valid creditors have been found, the debts of the deceased must be paid from the funds in the estate. The executor is never personally liable for any of these debts.
- Notify interested parties. In addition to determining valid creditors, an executor is also responsible for locating and notifying the beneficiaries of the will or any potential heirs of the deceased.
- Distribute property to the beneficiaries. After the fees, taxes and creditors have been paid, the remaining assets are ready to be distributed to the heirs or beneficiaries. In some cases, this means the executor will need to sell some property or set up trusts, if required by the will.
- File tax returns. Estate taxes and incomes taxes must also be paid within the time limits set by law.
- Keep accurate records. The executor is expected to keep accurate records of all estate-related transactions, in order to create a final accounting. This accounting is then filed with the court. The beneficiaries will review the final accounting before the distribution of the estate is completed. The estate is closed when the distribution of the assets with receipts from the beneficiaries has been accomplished and the final accounting has been approved by the court.
Serving as an executor is an incredibly important responsibility. It requires a great deal of work. Executors are entitled to compensation for their service, which is approved by the probate court, as well.