After a person passes on, the property they own or have placed in trust often passes to their loved ones. An executor (also called a personal representative), a trustee or both might manage their possessions during this time. What should you know about your duties if a loved one selected you as a trustee or executor?
How is an executor different from a trustee?
The executor (sometimes called a personal representative) is responsible for managing the estate of the deceased, according to the wishes outlined in the will and in accordance with the law. If there is no will, the court may appoint an administrator instead.
A trustee, on the other hand, manages a trust set up by the deceased. Because trusts often avoid the probate process, trustees can sometimes provide for beneficiaries directly instead of going through the probate process. They may also manage the estate long after the person passes, depending on the terms of the trust.
What does an executor do during the probate process?
An executor takes on many different tasks during probate. These responsibilities include:
- File for probate: The process officially begins when the executor files the will and death certificate with the probate court. The court then issues a letter of testamentary, which grants them the authority to act on behalf of the deceased’s estate.
- Notify stakeholders: The executor must notify beneficiaries and creditors of the death. This includes family members, beneficiaries named in the will, creditors, and sometimes public announcements.
- Gather and manage assets: An executor needs to collect all of the deceased’s property. Until they close the estate, the executor must also maintain these assets.
- Appraisal: Some assets may need to be appraised to determine their value, which is important for distribution and tax purposes.
- Settle debts: The executor is responsible for paying the debts of the deceased from the estate’s funds. This might include utility bills, credit card debt, and personal loans.
- File taxes: The trustee must file a final income tax return for the deceased and estate taxes if the estate exceeds certain thresholds.
- Distribute assets: After they have paid any debts and taxes, the executor will use the will as a guide to distribute the remaining assets in the estate.
Whether or not a person’s estate goes through the probate process, the trustee or executor representing them may benefit from legal guidance. The right support can help executors and trustees alike uphold their responsibilities with greater confidence, handle any conflict that arises and ensure that they fulfill the wishes of the deceased.