“You can’t take it with you when you go”. It’s a cliché, yes, but it is also a truth that matters. If someone dies with a valid will, the probate court will probably appoint the executor named in the will to manage the deceased’s possessions. The role of the executor is not easy, however.
At Perry Morgan, as probate lawyers in Northern California, we regularly help executors manage their duties and responsibilities. Our work in this area has shown us how important it is to understand what being an executor involves — whether you’re planning your own estate or have been named as someone’s personal representative.
Who Is the Estate Executor?
The executor is the person who makes sure that the distribution of your estate after you die complies with your wishes, as expressed in your last will and testament, as well as California law. The estate is everything that the deceased owned at the time of death, both tangible and intangible, minus anything that was removed from the estate during the deceased’s lifetime, such as the assets of a living trust.
How Is an Executor Appointed?
The appointment of an executor (also called a personal representative in some states) begins with the deceased person’s will. In most cases, the probate court will honor the deceased person’s wishes and appoint the individual named in the will.
Who Can Be Named as Executor?
While almost any adult can be named in a will as an executor, California has specific requirements for who can actually serve. Executors must be:
- At least 18 years old
- Of sound mind
- Free of felony convictions
- US residents (with some exceptions)
Most people choose a spouse, adult child, or other family member to serve as executor. Sometimes, more than one executor is named in the will to serve either jointly or in succession. For estates with complex investment accounts or business interests, naming a professional fiduciary or trust company might be more appropriate.
When Executor Duties Begin
Although officially named in the will, an executor’s legal authority doesn’t begin until the probate court issues Letters Testamentary. However, practical responsibilities often start immediately after death:
- Immediately after death: Arrange funeral services, secure the deceased person’s property, and notify immediate family.
- Within days/weeks: Locate the will, gather important documents, and contact an estate attorney if needed.
- Filing with the court: Submit the original will with a petition for probate and a death certificate.
- After court appointment: Begin formal estate administration, including inventorying assets, filing income tax returns, and managing estate affairs.
The court then issues “Letters Testamentary” (sometimes called “Letters of Administration”), which legally authorizes the executor to act on behalf of the estate.
If the named person declines to serve, the court will appoint an alternate named in the will or choose someone else. If a family member objects to the appointment, they can petition the court with valid grounds for their objection. If no executor is named or the will is found invalid, the court will typically appoint a close relative to handle the deceased person’s property.
What Are the Responsibilities of an Executor of an Estate?
The executor of an estate has duties that can result in significant liability if you fail to perform them properly. Following is a description of some of these duties.
Make a Copy of the Will and File It
Make a copy of the will and file the original with the probate court. Remember that if the probate court determines that the will is invalid, your nomination in the will is also invalid. In this case, the court will declare the deceased intestate, and it will name an administrator to distribute the deceased’s assets according to California intestate succession law.
Obtain the Death Certificate
Soon after the deceased is declared dead by a medical professional, local authorities will issue a death certificate. Normally, the funeral home will obtain the death certificate for you. If it doesn’t, you can obtain a California Death Certificate from the state Department of Public Health.
Notify Banks and Government Agencies About Death
Certain organizations will need to know about the decedent’s death. The most common parties to notify are the Social Security Administration, the banks that administer the decedent’s bank accounts, and life insurance companies.
Make a Decision on What Kind of Probate Is Necessary
You need to determine what type of probate you need to petition the court for, if any.
Some alternatives include:
- A spousal property petition for property the spouse will inherit.
- A small estate affidavit. If the estate is small enough, you can use this to avoid a court appearance altogether.
- Simplified probate procedures, if the estate is small enough.
- Formal probate.
You also need to petition the court to name you as executor. You are likely to need a lawyer for this, especially if the decedent did not name you in the will (if the named executor is deceased, for example).
Set Up Bank Accounts in the Name of the Estate
You use estate bank accounts to collect debts that third parties owe to the estate and to pay debts that the estate owes to creditors.
Inventory Estate Assets
You must create a comprehensive list of estate assets and liabilities, and you must file an Inventory and Appraisal with the probate court. You must also maintain estate property in good condition until it is distributed or sold.
Represent the Estate in Court If Necessary
You must defend the estate in court (through lawyers) if someone sues the estate, which may include hiring an estate attorney who specializes in probate litigation. An estate creditor might file a claim against the estate seeking payment for unpaid bills or services, or a family member might contest the will by challenging the deceased person’s mental capacity at the time of signing.
In any of these cases, you represent the estate’s interests as a whole, not any individual beneficiaries, and must make decisions based on what best protects the estate’s assets and honors the deceased person’s wishes.
Pay Debts and Taxes, and Collect Assets
You must set up a bank account for the estate. This is a crucial step in proper estate administration that creates a clear separation between the deceased person’s finances and your own. The estate account allows you to manage all incoming and outgoing funds transparently, which is essential for court accounting and protecting yourself from potential liability.
As executor, you have significant financial responsibilities that extend well beyond basic banking. You must determine the estate’s accounts receivable and collect them, including outstanding wages, investment income, and debts owed to the deceased person. This often involves contacting various institutions, providing death certificates and your letters of administration, and sometimes negotiating for payment.
Regarding tax obligations, you must file multiple tax returns, including:
- The deceased person’s final income tax returns.
- Estate income tax returns if the estate earns more than $600 in a tax year.
- Potentially estate tax returns for high-value estates.
Tax matters can become quite complex, especially when investment accounts are involved. Many executors find it beneficial to work with a professional tax preparer who specializes in estate matters to ensure compliance with all IRS requirements.
You must also pay the estate’s debts from estate funds, following specific priority orders established by state law. Common expenses include:
- Funeral and burial costs
- Estate administration expenses
- Medical bills from the deceased person’s final illness
- Secured debts like mortgages
- Unsecured debts such as credit cards
- Any other valid claims against the estate
The Social Security Administration must be notified promptly about the death to stop benefit payments. Any payments received after the date of death typically need to be returned.
In cases where debts exceed liquid assets, you might have to sell some estate assets to pay creditors. This process requires careful consideration of which assets to liquidate first, often prioritizing non-sentimental items before family heirlooms or the family home.
Distribute Assets
Among the executors of an estate’s responsibilities, distributing assets is perhaps the most important. You must distribute any remaining assets to estate beneficiaries according to the will and within the bounds of California law.
Now Is the Time to Begin
At Perry Morgan, our attorneys can help you create an estate plan that is individualized and tailor-made to reflect your needs and desires so that your beneficiaries will not face any nasty surprises after you die. Alternatively, if you have been named executor of an estate, we can help you fulfill your responsibilities.
Contact Perry Morgan today, either online or by telephone at (925) 660-7544.
