Executing a will might take a few months to a few years, depending on the complexity of the estate. Executors are legally liable for the safekeeping of the testator’s property, and for making sure all estate debts and taxes are paid. Most states require that an executor post bond when she assumes office. This is an insurance policy that will pay any financial claims against her if she deliberately or inadvertently does something wrong that financially hurts the estate.
As the executor of a will, the probate court has to authorize you to legally work with creditors, the court and banking institutions on the estate’s behalf. You must also take an oath of office. Depending on the state where the testator died, certain documents must also be filed with the probate court to open the estate. These usually include a certified copy of the death certificate, generally available through the funeral home.
As executor, you must safeguard the estate’s assets until distribution. Some, such as bank accounts, are easy to secure. Your “letters testamentary,” or the documentation the probate court gave you allowing you to act on the estate’s behalf, permit you to move the funds into an estate account for safekeeping. Insurance proceeds naming the estate as beneficiary may involve filing a claim with the company to secure the payout. Appraisals may be required to establish the value of real estate, collectibles and business interests. The executor of an estate is legally responsible for assigning accurate values to all the testator’s assets. Insurance premiums on property must be paid through the estate to protect anything of significant value.
An executor is also responsible for any regular bills due at the time the testator died. These can include utility bills, auto lease payments and health insurance premiums for dependents. You must pay them out of the estate funds if they are pressing, or notify the creditors that there will be a delay in payment while you sort out the estate. Next of kin may also be entitled to a living allowance, which you should arrange for immediately. You should also pay the testator’s funeral expenses, and notify all other creditors that the estate is in probate, either directly or through notice posted in the local newspaper. As claims come in from creditors, you must either pay them or reject them. Also, prepare, file and pay tax returns, both individually for the deceased and any that might be due for the estate, depending on its value.
When all debts and taxes are paid, the executor is legally responsible for distributing the remainder of the estate to the will’s named beneficiaries. Some states do not allow you to do this without an order from the court. Since an executor can be held legally liable for disbursing property prematurely and running out of money to pay the estate’s debts, ask all beneficiaries to sign refunding agreements stating that they will return their bequests to the estate if there should be a shortfall.