Many people don't realize the amount of paperwork and numerous procedures that must be completed when someone dies.
If you've recently lost a loved one, making sense of their estate plan is most assuredly very low on the list of things you'd like to focus on. However, if you've been named Executor in their will, you have duties that extend beyond simply grieving.
The person named as Executor is someone the deceased specifically appointed in their will. Their Executor is someone they trusted and had a lot of faith in. Executor duties include:
- Probating the decedent's Last Will and Testament: New Jersey estate law requires that (most, but not all) wills proceed through probate court in order for the Executor to fulfill his or her duties (listed below).
- Determining precisely what assets exist in the estate: Assets include any real estate, valuable personal property, insurance proceeds, monies in any bank and/or retirement accounts, investment revenue, and anything else that can be liquidated for cash (if so directed in the decedent's estate plan). Any items that are to be left to an heir (named in the will) must also be located and secured for later distribution.
- Establishing what (if any) debts were owed by the deceased at the time of death: All debts, as well as incurred costs and expenses, can be paid with the above-mentioned assets that are now property of the estate.
- Filing the appropriate inheritance tax return: New Jersey, along with several other states, require two separate taxes when someone dies - a NJ state estate tax and an inheritance tax. The inheritance tax is based on everyone the deceased named in their will and the relationships of the heirs to the decedent. All taxes must be paid by the Executor and can be paid using money from the estate, however, failure to pay the appropriate taxes can make you personally liable. Find out more here.
- Distributing the bequests listed in the will: The executor may only distribute assets to the named beneficiaries after all of the above items have been checked off the list. This ensures that there will be enough money in the estate to pay all taxes, costs, expenses and debts.
If your loved one named you Executor of their estate, they obviously felt strongly that you were up to the tasks required.
Estate planning attorneys always advise clients to select an Executor or Executrix (female) who is:
- Intelligent
- Honest
- Responsible
- Level-headed
- Decisive
- Reliable
- Organized
- Confident
Additionally, Executors are usually found to be good communicators and effective mediators, as they must correspond with a multitude of people and institutions in the process of executing a will.
It is also common practice to (understandably) select an Executor who is a close family member. Most people feel more comfortable knowing that their estate will be handled by someone they know well. The best executors are able to keep the decedent's interests in mind while simultaneously seeing that their will is handled both to the letter of the law and also expediently.
There are some people who
may not serve as anyone's Executor. These include:
- Anyone under the age of 18; and
- Convicted felons
New Jersey law dictates that out-of-state Executors must post a bond when the will is in probate court. This bond protects the estate and its beneficiaries and is an insurance of sort in case of any foul play or poor choices made by the Executor.
Estate Executors in New Jersey have the right to hire an attorney, an accountant (or both) to assist them with their duties. These professionals' fees can be paid using money from the estate. If you've been named Executor of a complex Estate, you should at least consult with a
NJ Estate Planning lawyer to be sure that you have a solid understanding of what your new job entails.
Image credit: Erik Soderstrom