If you have been named as the executor, administrator or a trustee you will have a number of important responsibilities. A fiduciary named under a Will to administer an estate, administrator, is often called the executor or personal representative, so you may hear these terms used interchangeably. While you can certainly act as executor on your own, you may run into various risks involving personal responsibility if you are unfamiliar with the fiduciary laws in the State of New York. That is why many appointed executors or trustees prefer to have an attorney at their side to ensure everything is taken care of properly. For now, learn more about probate administration and how to proceed.
Responsibilities of Executor or Personal Representative
As executor, you will be responsible for managing the estate in question, and when the time comes, distributing the assets of the decedent to the beneficiaries. The following are some of the key steps that will need to be taken by an executor:
- Locate and identify Assets of the decedent – All assets of the decedent must be located and identified. This includes financial accounts, real estate, and other personal property (cars, heirlooms, etc.) as well as lost assets held by the State comptroller.
- Paying Debts – Any valid presented debt that the decedent owes must be evaluated and analyzed and paid from the estate. This will typically be done out of any cash accounts owned by the estate, but if necessary, assets may be sold in order to pay off debts. Sometimes, if the debts of the decedent exceed the value of the assets of the estate, the estate may become insolvent. New York has specific set of laws for the executor to work with the insolvent estate.
- Manage the Estate – Executor is responsible for making sure all tangible assets in the estate are kept in good working order, preserved, insured, where necessary, and taken care of. This includes paying bills for any real estate, preserving art, insuring any collectibles and antiques, and more.
- Handling Decedent’s Taxes – Any final tax expenses of the decedent must also be paid out of the estate.
- Handling estate taxes –executor is responsible to pay and file estate tax returns for the estate of the decedent. The estate may be responsible for the state estate taxes, federal estate taxes and generation skipping transfer taxes.
- Handing estate income taxes – estate is a separate income-taxable entity, just like an individual or a company. Many do not realize that, during estate administration, executor will have to make many tax elections and decide on the timing of distributions to ensure that the estate or beneficiaries pay income taxes timely and in the lowest income tax bracket.
- Distribute to Beneficiaries – Once everything else is taken care of, all assets within the estate must be distributed to the beneficiaries. If there is no Will in place, the administrator will have to be guided by the statutory laws in the State of New York as to who gets what and in what order and in what proportion.
- File an Inventory/Account – Finally, any money you spent, or actions you took, as executor or administrator should be tracked throughout the process. In the end (or whenever it is requested by the court or beneficiaries) you need to file an inventory with the court and may have to file an account of all your proceedings as fiduciary of the estate.
Once all the assets have been distributed and the account of what has been done has been filed, your role as executor or administrator has been concluded. This entire process will sometimes take just a few weeks, and other times could take many months or even years. Many people consider it an honor to be named executor, but it is also an important responsibility. Executor may also be entitled to commissions for his or her hard work as fiduciary of the estate.
You Don’t Have to Handle it On Your OwnIf you are unsure of how to handle certain aspects of the estate administration, you don’t have to try to figure it all out on your own. You can have an attorney working with you every step of the way to ensure everything is done correctly. Our team has helped hundreds of individuals and families with their probate and estate administration needs, and we can help you too. If you are a beneficiary under a Will or a distribute under the State law and you need an analysis of your share of the estate, we can help you too.