Table of Contents:
- Duties of an Executor in Wisconsin
- What Are the Duties of an Executor of a Will in Georgia?
- Executor Duties in Indiana
- Executor Duties in Pennsylvania
- What Are the Duties of an Executor of a Will in Washington?
The goal of being a personal representative is to close a decedent’s estate. For an estate valued at more than $50,000, a personal representative oversees the probate process. For an estate valued at $50,000 or less, a personal representative closes the estate without court involvement. Upon completing all duties, asset distributions are first made to a surviving spouse and any minor children as required under Wisconsin law and then according to instructions in the decedent’s will. If no will exists, remaining asset distributions go to legal heirs in accordance with Wisconsin Statute 852.01 succession laws.
Manage the Estate
Duties that focus on managing the property a decedent owned or controlled include identifying and collecting all assets not jointly owned or disposed of in a will. This includes personal property, vehicle titles, real estate deeds and bank and investment accounts. Using Form PR-1811 and PR-1831, a personal representative must then inventory and determine the fair market value of the decedent’s assets on the date of death and transfer ownership from the decedent to the estate. For financed assets and real estate, a personal representative must continue meeting all financial obligations until liquidating or passing these assets to the decedent’s heirs.
Locate and Notify Creditors
After receiving Form PR-1804, Notice to Creditors, and PR-1805, Deadline for Filing Claims, from the probate registrar, a personal representative forwards the notice to all known creditors and publishes a copy of each notice in the local newspaper. Wisconsin probate laws require that the notice be published once a week for three consecutive weeks, with the first publication occurring within 15 days from the date the probate registrar signs the notice. Creditors then receive payment after the executor pays any federal and state taxes due but before she distributes any proceeds to heirs.
File Tax Returns
A personal representative is responsible for paying the decedent’s and the estate's federal and state tax obligations. According to Internal Revenue Service Publication 559, Survivors, Executors and Administrators, the IRS requires an individual income tax return covering the period from Jan. 1 of the current year through the date of death and Form 1041 to report any income received by the estate between the date of death and the date the estate closes. The Wisconsin Department of Revenue also requires a personal and an estate income tax return. In addition, if an heir receives taxable proceeds -- such as an individual retirement account, dividends paid on stocks, interest paid on bank accounts or installment payments on a land contract -- a personal representative or an accountant must prepare and send each heir a Schedule K-1 from the estate.
The executor collects the decedent’s assets in a process called “marshaling” and identifies creditors. Typical duties include paying bills, judgments and probate expenses. The executor prepares tax returns, files court reports and communicates with parties to the probate process, such as heirs and creditors. She uses the assets in the order prescribed by Georgia probate law, such as payment of debts before distributions to heirs.
Protect Estate's Interests
The executor’s duties include protecting the interests of the estate. This can include hiring an estate attorney, opening an estate bank account and placing required legal notices in newspapers for potential heirs and creditors. The executor can take legal action to compel cooperation and, when necessary, sell assets. He maintains a complete record to document work performed on behalf of the estate.
Asset Distribution and Closing the Estate
The executor submits an accounting and report -- including an inventory of assets -- to the court after all debts are paid and requests permission to distribute the remaining assets to heirs. Once the estate is fully administered, the executor submits a final accounting and report to the court and requests permission to close the estate.
Manage the Assets
As executor, your job under the Indiana statutes includes identifying the estate assets, such as bank accounts, real estate, investments and collectibles. You must make an inventory, take control of the different assets and manage them as needed -- paying the mortgage on real estate, keeping up insurance and handling repairs, for instance.
Debts and Assets
It's your responsibility to pay any taxes that are due -- the decedent's final income tax return, the estate's income tax return, property tax on any real estate and the federal estate tax, if necessary. You must attempt to find anyone the deceased owes money to and settle the debts. Only after everything is paid do you get to distribute assets to the heirs.
Getting It Right
If you don't think you'll make a good executor, you can refuse the appointment. If you accept the job, you don't have to go it alone. The Indiana Bar says most counties have helpful executor guides in their online legal form libraries. You can also hire an attorney or other professional with estate funds to help you in areas where you lack expertise. You're entitled to a fee for the work -- either one the deceased set in the will or one the probate court considers fair and reasonable.
Price the Estate
As executor, you have to draw up a list of all the assets -- savings accounts, real estate, insurance, valuable jewelry and everything else the deceased owned. For cars, houses or other noncash assets, Spencer's Law Firm says online, you may have to use the estate funds to hire an appraiser. If the assets are $25,000 or less, not counting real estate, the Nolo legal website says you should contact the local probate court. An estate that small may be able to use simplified probate. This wraps up the estate’s affairs and delivers the assets to the heirs faster.
Before distributing any assets, you have to pay the estate's debts. Taxes are the top priority, including the deceased’s last tax return, the estate’s income tax return, plus any estate tax or Pennsylvania inheritance tax due. The estate pays inheritance tax if anyone but a spouse or charity inherits. Paying within the first three months after the death gets the estate a 5 percent tax cut. After taxes come any bills the deceased hadn’t paid off, such as credit card payments, mortgage payments and car loans.
Manage the Estate
Until the assets actually pass to the decedent’s heirs, it’s your job to manage the house, the investment accounts and other items. If the estate includes real estate, for instance, you use the estate’s cash to make mortgage and maintenance payments. If there’s not enough cash in the estate accounts to pay the bills, you have to decide which assets to sell to raise money. If you need to recruit professionals -- accountants, real-estate agents, attorneys -- that’s a legitimate use of estate funds.
Fees and Bequests
Serving as executor is a demanding job, and you're entitled to a fee. Unlike some states, the Smith Kane Holman law firm says online, Pennsylvania doesn't have a clear, court-approved fee schedule. The fee for a given estate reflects the size and the effort involved, but figuring out what you're entitled to may require an attorney's advice. After the estate debts, bills and executor fees are paid, distribute the remaining assets to the beneficiaries in accordance with the decedent's will. If some property isn't listed in the will, follow the guidelines in Pennsylvania law.
An estate administration takes seven months to two years to administer and close. The job of the executor, or "personal representative," starts with collecting and managing the assets of the decedent. The personal representative must prepare a balance sheet of the assets and liabilities of the deceased person or an "Inventory & Appraisement." In addition, the executor must pay the estate's obligations and taxes. Other actions may include selling assets to pay bills and debts, borrowing funds or managing the deceased's business.
Personal representatives may receive reimbursement for justifiable out-of-pocket expenses for managing and distributing estate assets. The person has the duty to fulfill his responsibilities of handling the estate to the best of his capabilities. The executor may incur liability if improprieties occur concerning the mismanagement of assets.
Obtain an EIN
The personal representative must apply for an employer identification number (EIN) for the estate. The executor must enter this number on any federal and state tax returns for the estate. Typically, the personal representative files a written document with the Internal Revenue Service notifying the IRS of his appointment as the estate executor. This notice authorizes the personal representative to negotiate, settle or pay taxes on behalf of the estate.
Pay the Estate's Obligations
The executor must pay the decedent's debts out of the estate's resources. If there is doubt concerning the validity of a debt, the personal representative may file litigation to resolve the matter. Expenses incurred by the estate, such as appraiser fees, accounting fees and legal expenses must come from the monies left in the estate. The executor hires professional help as necessary to manage and administer the estate and must pay for any expertise out of the estate's resources.
The personal representative assumes legal title to any property or assets contained in the estate. The person must gather the assets and document the property in an Inventory & Appraisement. Sometimes, the executor may have to sell stock, real estate or other assets to pay the estate's obligations. Other tasks may include obtaining tax waivers or filing affidavits.
The estate must pay state and federal income taxes when due and the personal executor has the legally responsibility to take care of this matter, including the payment of death taxes and filing the final tax return. Failure to perform this task correctly can make the executor liable for any unpaid taxes. As a rule, the executor must pay the taxes before other obligations. The size of the estate determines whether to file an estate tax return.
Have Assets Appraised
Often, the executor must bring in a professional appraiser to determine the value of jewelry, real estate, artwork or other assets. The "fair market value" of the property will determine the amount of estate taxes the personal representative must pay and assist when it comes to dividing assets between the beneficiaries.
Distribute the Estate
Once the executor has paid the estate's obligations and taxes, the personal representative will distribute the remainder of the assets between the spouse, heirs and other beneficiaries named in the will. Sometimes, the beneficiaries may receive a partial distribution of their share of the inheritance before the estate officially closes.