What is the role of an executor?
After the death of a loved one, the question frequently arises, "What do I do now?"
You know the deceased loved one had a will and that you were named as the executor.
The question now becomes, "What does an executor do?"
The executor is responsible for the settlement of the estate.
Connecticut statutes require an estate be settled through the probate court. If the estate has a value of less than $40,000 and has no real property involved, there is a streamlined process to bypass most of the steps below.
This article assumes an estate of more than $40,000.
The estate process is initiated by the presentation of the will to the probate court. If the court accepts the will, because the decedent had the required mental capacity to make a will, and that will was properly drafted, signed and witnessed, the will should be "admitted to probate."
The court will issue a decree naming an executor, usually the person designated in the will to fulfill that role.
If there is no will, then an "interested party" can file an application with the court and seek to be appointed the administrator of the estate. The duties of an administrator and executor are very similar.
The executor must take charge of the assets by locating and identifying real estate, banking and investment accounts etc. After obtaining an Estate Identification Number from the IRS, the executor should bring that EIN and a copy of his Fiduciary's Appointment (sometimes called "letters testamentary") to a bank and open an estate account.
Liquid assets may be transferred into the estate account.
Title to investment accounts may be changed to the estate of the decedent in the name of the executor. If there are funds or assets in the estate, the executor has a duty to beneficiaries to be prudent in their investment, assuring a fair return with little or no risk to principal.
The statute requires that the inventory be presented to the court within 60 days of appointment, but many courts permit some flexibility in that requirement.
All assets held only in the name of the decedent should be reported to the court on an inventory. It is important to ascertain the "date of death" value of all assets. It is that number that must be reported on the inventory.
Shortly after the appointment of the executor, the court will cause a legal notice to be published in a local newspaper.
This notice begins the period of 150 days within which persons who may have claims against the decedent for money due at the time of death shall present their claims to the executor.
If the claims are not presented within this time frame, usually, the claims must be made against the beneficiaries and not against the estate. The executor must evaluate the claims and pay those that are just and proper and give a written denial of those that are rejected. A list of all claims made against the estate and the disposition of those claims must be presented to the probate court.
Depending on the size of the estate, a tax plan should be developed.
Currently, in Connecticut, if the estate, including all assets reported on the inventory plus all assets that pass outside of probate, including, but not limited to, proceeds of life insurance, IRAs, jointly held assets, accounts "in trust for" or "payable on death," totals less than $2 million, there will be no Connecticut estate tax due.
No federal estate taxes are due unless the estate value exceeds slightly over $5 million.
Within six months of the date of death of the decedent, the executor must file the Connecticut estate tax return. It will include everything that passed as a result of the death of the decedent.
The probate court will then assess its fee based on several variables but, for the most part, it will be based on the value of the estate for federal estate tax purposes.
If the will grants the executor the power to dispose of assets to raise money, the executor has wide discretion in doing so.
If there is no such grant of power in the will, the executor must petition the probate court for the authority.
Administrators always must petition the court before disposing of assets.
After calculation and payment of any estate taxes that might become due, the executor must prepare and submit the final estate administration account.
The accounting will start with what was reported on the inventory, add to that amount any interest, dividends or other additional property received, then account for all expenditures and, finally, determine the amount remaining for distribution.
A Request for an Order of Distribution will then be submitted to the court. A copy of the accounting may be submitted to all beneficiaries.
If no beneficiaries object to the accounting, the court will order that the distribution be made.
Real property will be transferred via a "Certificate of Devise" that is similar to a deed and is recorded on the land records.
Finally, 30 days after the court has accepted the accounting, the distribution can be made and the executor wraps up the estate by filing an affidavit of closing the estate with the court.
While the assistance of an attorney in the probating and settling of estates is not required, many people are reluctant to tackle the matter on their own.
If the assistance of an attorney is desired, make certain to choose an attorney who is experienced in probate matters.