by Matthew C. Sunderlin
An executor is a position created in a Last Will and Testament who has the responsibility to protect assets, pay all debts including taxes, and transfer the remaining assets to the beneficiaries. The probate process has many requirements in order to assure the decedent’s property goes to the right people. Legal representation is not required, but errors can create personal liability for the executor. An attorney assures proper steps are taken and deadlines met.
First, make a list and determine the values of the decedent’s assets. Find out who are the beneficiaries on bank accounts, IRAs, 401ks and life insurance. If no beneficiary is named, the asset may come to the estate.
The next step is to find the original Will – not a copy. The executor should call the probate clerk of the circuit court in the city or county where the decedent passed away to make an appointment to “qualify.” The clerk needs the original Will, an estimate of the value of the estate’s assets and a list of the living heirs. The executor will pay probate tax and may also need to post surety on the bond if required by the clerk.
The executor must mail the notice of probate within 30 days to each beneficiary and any person who would have inherited if the decedent had died without a Will, and file an affidavit with the clerk confirming the notices were mailed.
Do not rush to pay bills or distribute assets to beneficiaries. The executor must be assured that assets will exceed debts before paying any bills. In an insolvent estate, all debts are not treated equally and must be paid in an order as set out in the law.
The executor should set up a checking account and deposit all receipts and pay all bills from the account. It is very important to keep the estate’s money separate from the executor’s personal funds. The executor will need to obtain a tax identification number from the IRS for the estate to open the account.
Keep all real estate under lock and key so that personal property does not disappear. It may need to be sold. An appraisal of real or personal property is usually necessary. As soon as practicable, notify all banks, financial institutions, insurance companies and all agencies (i.e. Social Security, Veterans’ Affairs, Medicaid) of the death and determine whether the estate is the beneficiary of any funds. Check with the Virginia Department of Treasury for escheated property.
Cancel credit cards, inform all creditors of the death and ask for final bills. The decedent’s final income taxes must be filed and paid. An estate with a gross annual income of $600 or more must file a fiduciary income tax return. Talk to a tax professional about whether an estate tax return is required.
The Executor is required to file an inventory of the assets with the Commissioner of Accounts within 4 months of qualification, and an accounting within 16 months of qualification. These reports should be shared with all beneficiaries. Before distributions, and to provide maximum personal liability protection, the executor should consult an attorney to determine whether a Debts and Demands hearing and Court order approving the final distributions is necessary.
Once the final accounting is approved, the executor’s duties are over – now wasn’t that easy?