How to prepare to be an executor of an estate

Dear Savvy Senior,

My uncle recently asked me to be the executor of his will when he dies. I feel honored he asked me, but I’ve never done this before, and I’m not exactly sure what the job entails. What can you tell me about it?

Helpful Nephew

Dear Helpful,

Being named executor is indeed an honor. It shows your uncle trusts you. But it also can be a significant responsibility, especially if his estate or family situation is complicated. Here’s a look at what the role involves so you can decide if it’s something you’re comfortable taking on.

Executor duties

As executor you’ll be responsible for settling your uncle’s affairs after his death. Depending on the estate, your duties may include the following:

—Filing paperwork with the probate court to validate the will and officially open the estate.

—Locating and taking inventory of all assets.

—Paying outstanding bills, funeral expenses and any taxes owed using estate funds.

—Notifying banks, government agencies including Social Security, credit card companies and the post office of his death.

—Preparing and filing his final income tax return.

—Distributing remaining assets to the beneficiaries named in the will.

Keep in mind executor responsibilities and deadlines vary by state. Most state bar association websites offer probate guides or checklists that outline the rules where you live.

Get organized

If you agree to serve, one of the best things you can do now is help your uncle get organized. Make sure his will is up to date and find out where important documents are stored such as deeds, financial account statements, insurance policies, passwords and contact information for advisers. Having quick access to these items will save you time and stress later.

If the estate is complex, you don’t have to handle everything alone. An estate attorney or tax professional can guide you through the process, and their fees are typically paid by the estate. To find qualified help, you can search directories at the National Association of Estate Planners & Councils (www.naepc.org) and the National Academy of Elder Law Attorneys (www.naela.org).

Prevent family conflicts

One of the biggest challenges executors face is family tension. Ask your uncle to clearly communicate his wishes to beneficiaries ahead of time, including who will receive personal belongings and family heirlooms. Wills often leave these decisions to the executor, which can create unnecessary friction.

If he hasn’t already, suggest he create a written list outlining how personal property should be distributed. Clarity now can prevent conflict later.

Executor fees

Executors are generally entitled to compensation, which is paid by the estate. In many states fees are based on a percentage of the estate’s value, often ranging from 1-5%, depending on size and complexity.

However, if you’re also a beneficiary, you may choose to waive the fee. Executor compensation is taxable income while inheritances typically are not subject to income tax.

If you’d like a step-by-step resource to guide you through the process, “The Executor’s Guide: Settling a Loved One’s Estate or Trust” from Nolo is a helpful reference and costs about $32 at www.nolo.com.

Serving as executor can be time-consuming, but with good organization and clear communication, it’s a manageable responsibility and a meaningful way to honor your uncle’s trust.

Send your questions or comments to questions@savvysenior.org or to Savvy Senior, P.O. Box 5443, Norman, OK 73070.