Know the Law and Understand the Will
As an executor you are governed by a number of laws. These include the common law which has been developed by the courts over time, as well as federal and state laws. These laws can vary from state to state, so it is essential that you become aware of the specific state laws that you must follow. You are also responsible for understanding the will.
A will usually specifies the testator's wishes concerning a funeral and disposition of the body. It is the executor's duty to make sure that these wishes are complied with, if possible, and that funeral expenses are paid by the estate. Family members and close friends of the deceased will typically assist with funeral arrangements.
One of your first duties as an executor is to initiate probate, the legal process that assures that the decedent’s wishes are carried out. The probate court issue letters testamentary to officially appoint the executor to administer the estate. The letters testamentary entitle the executor to perform all of the functions that are necessary in order to satisfy the terms of the will. Probate regulations vary from state to state, but generally include notifying beneficiaries, making an inventory, paying taxes and other debts, and distributing property in accordance with the decedent’s wishes. All states require the filing of certain documents.
The American Bar Association, or ABA, states that your duties include preparing a thorough inventory and appraisal of the estate's assets. According to the Estate Settlement website, you must keep proper records and accounts, and must also keep bank accounts and financial assets of the estate separate from any other accounts.
Another duty you have as an executor is to pay the debts, including taxes, left by the decedent at the time of death. The University of Virginia specifies that you should open a checking account for the estate in order to pay debts, and the ABA advises that your responsibilities in this regard include taking care to pay debts in a timely fashion in order to avoid financially harming the estate. You can be held personally responsible if money belonging to the estate is lost. You will most likely be required to place a notice to creditors in a newspaper and notify the decedent's known creditors in writing.
Beneficiaries and Bequests
After expenses, debts and taxes have been paid, you then have to distribute the testator’s property and assets in accordance with his wishes as expressed in the will. According to the ABA, gifts of property and cash are distributed first; once those bequests are completed, the balance or residue of the estate, if there is one, is dispersed. The ABA further explains that sometimes at least some of the residue goes into a trust account for the benefit of beneficiaries, and that in some states you will need court approval for final distribution of the residue.
Close the Estate
Your final duty as an executor is to close the estate. This is done after all debts and expenses, including taxes, are paid and all assets have been dispersed. Some states require that you file a petition for closing the estate, or prepare a closing statement and send a copy to all beneficiaries and creditors. The original closing statement, along with other necessary documents, is then filed in the court.