The Role of the Executor in Your Will
The Executor is the person named in the Will to administer the estate. Upon the death of the person who made the Will (the Decedent), the Executor has to go to the Surrogate in the county in which the Decedent resided at the time of the death and file the Will for probate. Probate is the process by which the Surrogate admits the Will and qualifies the person named to be the Executor. Once this is done, the Surrogate will issue Letters Testamentary to the Executor. These Letters allow the Executor to stand in the place of the Decedent to perform all of the tasks that the Decedent could perform. It is the job of the Executor to determine the assets of the Decedent, collect them into one place, usually an estate checking account, and determine the gross value of the estate. Next, the Executor is obligated by statute to pay the outstanding debts of the Decedent including funeral debts, last medical expenses and administration expenses, including any death taxes that may be owed as a result of the estate. Finally, the Executor is responsible for distributing the assets as directed in the Will. Obviously this is an oversimplification of the Executor’s tasks. In some cases the collection of the assets can be complicated when there may be real property to be sold or when there are assets that cannot readily be converted to cash.
In performing its tasks, the Executor must at all times always act in the best interests of the estate and the beneficiaries named in the Will. The Executor is empowered to act on its own. This means that the Executor does not have to obtain the consent of the various beneficiaries.
The Executor is entitled by statute to compensation for its performance of the administration of the estate. This compensation, referred to as a commission, is based upon the value of the estate and upon the income the estate generates. The commission is 5% of the estate up to $200,000.00 and 3.5% of the estate between $200,000.00 and $1 million. The Executor is also entitled to a commission of 6% of the income generated by the estate. The Executor is not obligated to take the commission, but if it does, the commission is taxed to the Executor as income in the year in which it is received. Thus, the Executor must pay income tax on the commission received.
In choosing an Executor in your Will, you should choose someone who is trustworthy and can make financial decisions. In some cases, it may be advantageous to use a bank or trust company as the Executor, rather than a family member, because they are more experienced and perform these tasks as a business. In many cases they will charge the same fees as are allowed by statute.
The Executors responsibilities are complete when the assets are all fully distributed pursuant to the terms of the Will.