The job of an executor is to handle the estate of the deceased. In most cases, the deceased names the executor in his will. When there is no will, or when an executor can't complete the task, a probate court will appoint one. Under state probate rules, executors are responsible for filing the petition of probate and the will with the probate court and then seeing the process through to final distribution of the deceased's assets. Acting as an executor can be a complex and time-consuming process, but fortunately state laws also allow for fair compensation to executors from the estate assets.
Executors usually spend months administering a will through the probate court. State probate laws generally require executors to inventory estate assets, which involves tracking down such holdings as bank and investment accounts, real and personal property and life-insurance policies. The executor must notify beneficiaries as well as creditors to whom the estate owes money that a probate proceeding has been filed with the court. Executors must prepare final federal and state tax returns, pay all creditor claims and transfer property to beneficiaries according to the terms of the will.
Executor as beneficiary
If an executor is a friend or relative of the deceased, then the testator, may have provided for him as a beneficiary under the will. The executor, like any other named beneficiary, has a legal right to the bequest, as long as the estate is solvent and there are sufficient assets. Regardless of whether the named executor is also a beneficiary, state laws provide for executor fees and compensation from the assets of the estate.
Read More: Can an Executor Charge a Beneficiary for Duties?
In most states, the executor fee is set as a percentage of the estate assets, generally between 2 percent and 5 percent, with amount declining for larger estates. The executor's fee is paid by the estate before any debts are paid or assets are distributed. The executor may waive the fee or bill the estate for additional fees for extraordinary work and time in the case of complex estates. Provisions in the law for fees ensure that executors are paid for their services whenever possible, and that executors carry out their tasks to the best of their ability. Some states, such as Ohio, provide that executors are not liable for debts of the estate, nor may they profit by income earned from estate property.
A beneficiary of a will is not entitled to a larger bequest because he is also acting as the executor. This is true whether the executor was named in the will or appointed by the court. The larger the estate, the higher the fee allowed by law for acting as executor. Florida, for example, bases executor fees on a sliding scale based on the value of the estate -- a fixed fee for small estates and a percentage of the assets for estates worth more than $100,000.
Founder/president of the innovative reference publisher The Archive LLC, Tom Streissguth has been a self-employed business owner, independent bookseller and freelance author in the school/library market. Holding a bachelor's degree from Yale, Streissguth has published more than 100 works of history, biography, current affairs and geography for young readers.