"Probate" the will. An Executor's first duty is to apply to the Probate Court to have the will 'admitted.' The will has to be admitted to Probate in order for the Executor to be able to do his or her job. The first step of admitting the will may be easy or complicated, depending on the circumstances.
In Connecticut, the Executor submits the original will, a certified death certificate and an 'Application for Admission of Will' to the Court. Sometimes, we are able to admit wills to Probate quickly by using 'general waivers.' However, if there is an objection from an heir or beneficiary under an earlier will, if there are minor family members or if there are any ambiguities in the language of the will, it could take substantially longer. Having real property in more than one state also complicates the process.
Manage the estate. An Executor takes legal title to the estate assets and is personally responsible for their proper management. He or she must locate all of the assets and take control of them. He or she may have to manage or sell a business or manage an investment portfolio.
An Executor must be aware of the decedent's prior gifts. We've settled at least two estates where an Executor didn't know about prior gifts. In one of them, the gifts were in excess of $900,000. The Internal Revenue Service initially threatened a criminal prosecution until the Executor persuaded them that he was a victim, not a perpetrator.
Take Care of Tax Matters. An Executor is legally responsible for filing necessary income and estate-tax returns (federal and state) and for paying all estate and income taxes.
Value the Assets. An Executor must determine the 'fair market value' of all of the assets. He or she must often hire an appraiser to value certain assets such as a business, real estate or artwork. Depending on several factors, it may be advantageous to value assets at the high or low end of the range of fair market values. 'Partial interests' in businesses or real estate can be valued using discounts for lack of marketability and control. Properly determined and applied, these discounts can result in significant tax savings. Failure to see the opportunities for discount planning can subject the Executor to personal liability.
Pay the Bills. An Executor must make sure that the decedent's creditors are paid. Before he or she pays any claim, the Executor must be sure that it is valid and enforceable. Paying a fraudulent claim or one barred by the statute of limitations could subject the Executor to liability.
We recently settled the estate of a man who owned a 'collector car.' He had made an arrangement with a local dealer to leave the car in the dealer's showroom. This was a mutually advantageous arrangement. The owner of the car got free storage and the dealer had an attractive display. After the owner died, the dealer presented the Executor with a bill for over $30,000 for 'storage.' We successfully denied the claim.
Advances. If an Executor is certain that he or she has sufficient assets to pay all claims, expenses and taxes, he or she may make advance distributions to the beneficiaries. However, an Executor acts at his or her own risk in making distributions that have not been approved by the Court.
Accounting. An Executor must prepare an accounting for his or her entire administration in the format required by the Probate Court. The accounting must be accurate to the penny. An Executor is a fiduciary and is personally responsible for any errors.
Final Distribution. After all debts and expenses and taxes have been paid, an Executor's last job is to distribute the assets in accordance with the will.
Conclusion. The estate and income statutes and rulings have become increasingly more complex. If an Executor is to do his or her job efficiently and well, he or she must understand a number of issues. No one hires an inexperienced employee for a complex job yet, to a great extent, many Executors have no training. This is not a time for 'OJT.' We have been serving as counsel to individual and corporate Executors for over thirty five years. We can explain the Executor's jobs to him or her in plain English. We can help an Executor to make tax and administrative decisions that will be most beneficial to the beneficiaries.