The executor of an estate is designated in a will to tie up a decedent’s affairs. The executor is responsible for protecting the deceased’s assets until all debts and taxes have been paid. Finally, the executor will ensure that the remainder of the estate is transferred to the beneficiaries named in the will.
Who can be an executor?
The executor can also be a beneficiary of the will, but they must act fairly and in accordance with all provisions of the will. In North Carolina you must be at least 18 years old to serve as the executor, you cannot have been convicted of a felony, and the court must consider you “suitable” to serve as executor. “Suitable” is a nebulous characteristic that is typically taken to mean that you must be of good character to an objective party. An executor’s responsibilities can take anywhere from six months to a year or longer to complete, depending on the size and complexity of the estate.
The Responsibilities of an Executor
Have the will probated
The executor will first petition the court to probate (or approve) the will. Once the will is probated, the court will issue the executor “Letters Testamentary,” which gives the executor the legal authority to handle the deceased’s assets and affairs.
Locate and manage the deceased’s assets
The executor must locate and make a formal record of all of the deceased’s assets. Ideally, the deceased kept a detailed list of their bank accounts, retirement accounts, stocks, bonds, life insurance policies and real property. However, this is rarely the case. Thus, it becomes the executor’s obligations to determine and locate the executor’s assets.
Cancel the deceased’s accounts
The executor is responsible for cancelling credit cards, utilities and other creditors that were held by the deceased.
Be sure each asset is properly valued
Each asset must be valued for purposes of the estate accountings that are required. Certain assets, such as business interests, require a professional appraisal.
A Notice to Creditors must be placed in the local newspaper of the county in which the deceased resided. If there is no local newspaper then the clerk of the superior court (in the county where the deceased resided) will have alternative instructions. This step alerts creditors of the decedent’s death and allows them to make a claim with the local court if they believe the deceased’s estate owes them money.
Pay valid debts and taxes
The executor should repay debts, however certain debts and obligations are given higher priority: the estate’s administration costs (clerk’s fees, executor’s fees, etc.); funeral expenses; federal, state, and local taxes; liens on the deceased’s property; medical expenses the decedent incurred in their last 12 months of life. As such, in estates with limited funds, it is critical that the executor pay the outstanding obligations in the order of highest priority first.
Distribute the deceased’s assets
After paying the debts and obligations of the estate, all remaining assets must be distributed to the beneficiaries of the will or to those entitled to inherit them under state law.
Liability of Executor
While the steps outlined above can sound pretty straightforward initially, the reality is that many questions regarding the proper handling of the estate, assets, filings, and debts, tend to come up during the probate process. An executor is personally liable for the appropriate and correct handling of the probate process. As such, it is highly recommended that executors hire legal assistance to ensure the proper handling of the estate and limit their personal liability. Such legal expenses are paid for by the estate.
Have additional questions or concerns?
If you have any additional questions about naming an executor or being an executor, please call our office at (919) 443-3035 for a free phone consultation or contact us online. At the end of the call, you’ll know the next step and at a minimum, we’ll point you in the direction of resources that can help you. There is no obligation to you.