Being asked to serve as executor of a loved one’s estate can be an honor. However, this honor comes with numerous responsibilities, and you should be sure to understand these responsibilities before you accept the position.
An executor, also called a succession representative, has a legal responsibility to complete the final financial obligations of someone who has passed away. Because every succession proceeding is unique, the duties of executors can vary.
What do typical duties of executors include?
In complicated situations there could be over 100 tasks for the executor to complete. Although professionals are often hired to help, it could still take years to fulfill all the duties of an executor.
Some typical duties you may need to complete, include:
- Locating, collecting and managing your loved one’s assets
- Using your loved one’s assets to pay final expenses, such as funeral costs and outstanding debts
- Filing your loved one’s final income tax returns and paying income taxes
- Filing the estate’s tax returns and paying estate taxes
- Distributing your loved one’s assets according to the last will and testament
What happens if I do not complete a task properly?
If you accept an executor position, it is important that you take your duties seriously and take precautions to make sure you complete each task appropriately. If you do not complete your duties or if you complete them incorrectly, you could be held personally liable. This means that if you mess up, you could lose some of your own money.
Although being personally liable can sound intimidating, there are steps you can take to make sure your responsibilities are properly met. In many cases, an understanding of common mistakes can help you stay on the right track.
According to a recent Forbes article, some common mistakes you should aim to avoid, include:
- Failing to act
- Ignoring beneficiaries
- Favoring one beneficiary over others
Serving as an executor of a loved one’s estate is an honor that can involve accepting numerous responsibilities. If you have been asked to be the executor of a loved one’s estate, an understanding these responsibilities can help you make an informed decision to accept the position or not.