Executor

An executor is a person or institution named by someone during their lifetime to manage their finances and distribute their assets to beneficiaries according to their will. Also, they make certain that any debts or taxes owed on the estate or financial assets are paid before distributing them to heirs.

Their further duties may include filing the will to the court for probate, collecting any assets and financial obligations due, settling disputes, etc. They are, however, free to accept or reject the duties as described in the will. Once they accept, they become the fiduciary and responsible for performing the duties as instructed by the deceased.

• An executor is a person or institution named by an individual during their lifetime to manage their finances and transfer their assets to beneficiaries per their will.
• Submitting the will to the court for probate, paying off debts and taxes, distributing assets as per the will, and resolving disputes are the major duties of an executor.
• For their services, they charges a fee, which is around 3.5% of the total value of the estate or asset. 
• If the executor named in the will refuses to carry out their responsibilities, a substitute comes in place.

An executor is a legal term for a person named in a will to distribute assets to appropriate beneficiaries. Testators may appoint someone to manage their finances and properties for several reasons, particularly when beneficiaries are not ready to assume responsibility. Anyone from an adult family member to a financial professional or a legal person chosen by the court can serve the role. They could even be the beneficiary of the will in some cases.

Naming an individual or institution as an executor does not make them obligated to perform duties as instructed in the will. It is up to them to decide if they want to act as the legal personal representative for the deceased's estate or assets. If they agree to move forward with the will-maker's wishes, they must undergo a formal process to start functioning as a fiduciary.

Executors are primarily responsible for gathering, protecting, and managing the financial assets of testators and distributing them to beneficiaries as per the will. These assets can be anything from real estate to financial securities, direct and money market investments, and collectibles. They, however, do not perform these duties for free. Instead, they charge a fixed fee that can amount to 3.5% of the total asset value.

For example, if the deceased’s possessions are worth $1 million, the executor fees would be $35,000. This fee does not include property transfer charges, estate duty liability, etc.

Before distributing them to legal heirs, they must clear off debts and taxes applicable on ownerships and possessions. This process, known as probate, can take months or years and cost anywhere from 4% to 9% of the total estate value.

The person or entity might face disputes with co-executors or legal heirs as a will executor. Thus, they must keep the people involved in the process informed about the legal bindings. If they deny performing their duties, a substitute will replace them to proceed with the same.

As an executor of the estate, individuals are liable to perform several duties as instructed in the will. As soon as they accept the position of a legal personal representative of the deceased's financial estate or assets, they must fulfill the following responsibilities:

#1 - Submit the Will

After accepting to function as the fiduciary of the estate or assets, the first and foremost duty is to submit the will in the probate in the court to decide whether to sell the estate or assets of the deceased. The court reviews the legal document to ensure they meet state requirements. Moreover, the executor must be present in each court hearings.

#2 - Gather the Assets

The next on the list of responsibilities is identifying and gathering assets for evaluation, such as real estate, insurance policies, unpaid debts, etc. Safeguarding properties from being vandalized, assets from getting stolen, and checking financial accounts and instruments that the deceased had invested in is a must.

#3 - Pay Off Liabilities

They must ensure if the deceased left any debts or tax liabilities on personal property. If there are any, they are settled for final assessment. Then, based on the valuation of assets after paying off taxes and debts, they are distributed to beneficiaries according to the will.

#4 - Distribute Assets

The will-maker ensures that each beneficiary receives their fair share of the property or assets. Therefore, executors manage and distribute the deceased's fortune according to the instructions spelled out in the will.

#5 - Resolve Disputes

The distribution of asset shares may cause disagreements, leading to beneficiaries contesting the will or caveat. Beneficiaries can challenge the will in court if they question the proportion of their wealth from the deceased's property. This is the point at which executors must defend the will by demonstrating their legal standing.

When a beneficiary is unhappy with the provisions of a will, they file a caveat. Another cause for this could be mistrust of the executor. As a result, they must show that beneficiaries are wrong and defend their position and the terms of the will.

Aside from the roles listed above, executors may also be seen conducting the following tasks:

• Notifying the death of the will-maker to the beneficiaries
• Taking control of valuable assets until their evaluation
• Managing and supervising the distribution of the deceased's assets
• Taking care of the funeral expenses of the deceased
• Deciding on assets to be sold or disposed of as per the will
• Maintaining records of transactions and actions performed
• Representing the testator in court proceedings involving the beneficiary

This has been a guide to Executor and its Meaning. Here we explain how executors work along with their functions, duties, and responsibilities. You can learn more about from the following articles –

• Living Will
• Blind Trust
• Trustee