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Gina G. MacDonald: An executor has many responsibilities

Posted: August 20, 2009 10:31 p.m.
Updated: August 20, 2009 10:28 p.m.
Being the executor of an estate is not a task to be undertaken lightly. This person has the responsibility of managing the administration of a deceased individual's estate.

The time and effort involved will vary with the size of the estate. However, even an executor of a small estate will have important duties that must be performed correctly, at the risk of being liable to the estate or the beneficiaries.

The executor is either named in the will, or is appointed by the court in the absence of a will.

You do not have to accept the position of executor even if you are named in the will.

The average estate administration takes one year, though you won't need to work full time on it.

All this can be a lot of work, but remember the executor is entitled to compensation, subject to approval by the court.

Keep in mind the compensation is counted as income, so you will need to declare it on your income taxes.

Below are some of the duties you may have to perform as executor:

n Locate documents. If there is a will, but you don't already know where the will is or the will hasn't already been brought to court, you may need to find it among the deceased's belongings.

n Hire an attorney. You are not required to hire an attorney, but mistakes can cost you money. You may be personally liable if something goes wrong with the estate or the payment of taxes. An attorney can help you make sure all the proper steps are taken and deadlines met.

n Apply for probate. If there is a will, the court will grant you letters testamentary. If there is no will, you will receive letters of administration. This will officially begin your work as the executor.

n Notify interested parties. Notify the beneficiaries of the will, as well as any potential heirs (such as children, siblings, or parents who may or may not be named in a will). In addition, you will have to place an advertisement in a newspaper near where the deceased lived giving notice to potential creditors.

n Manage the deceased's property. You will need to prepare a list of the deceased's assets and liabilities, and you may need to collect any property in the hands of other people. One of the executor's jobs is to protect the property from loss, so you will need to assure the property is kept safe. You will also need to hire a probate referee to find out how much any property is worth. In addition, if the estate includes a business, you may have to make sure the business continues to run.

n Pay valid claims by creditors. Once the creditors are determined, you will need to pay the deceased's debts from the estate's funds. The executor is not personally liable for the decedent's debts. The estate usually pays any reasonable funeral expenses first. Other debts include probate, administration fees and taxes, as well as any valid claims filed by creditors.

n File tax returns. You need to make sure the tax forms are filed within the time frame set under the law. Taxes will include estate taxes and income taxes.

n Distribute the assets to the beneficiaries. Once the creditors' claims arc clear, the executor is responsible for making sure the beneficiaries get what they are entitled to under the will or under the laws of intestate succession if there is no will. You may be required to sell property in order to fulfill legacies in a will. In addition, you may have to set up any trusts required by the will.

n Keep accurate records. It is very important to keep accurate records of everything you do. You will need to create a final accounting, which the beneficiaries must review before the distribution of the estate can be finalized.

The accounting should include any distributions and expenses as well as any income earned by the estate since the decedent died.

Once the final accounting is approved by the beneficiaries and the court, the court will close the estate.

Many executors have tried to go it alone until the Court refuses to deal with them without representation. An attorney helps to protect you from surcharges within the probate process.

Gina MacDonald's practice is limited to Estate Planning, Probate & Elder Law. MacDonald maintains her practice in the Santa Clarita Valley and can be reached at (661) 251-1300. Her column represents his own views, and not necessarily those of The Signal. "It's The Law" appears Fridays and rotates between members of the Santa Clarita Valley Bar Association.


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