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Executor Duties Checklist: Finalizing the Estate
This is the last of a series on the duties of an executor. Think of it like a checklist, with everything an executor needs to take care of. To make this list as comprehensive as possible, we’ve divided the series into 12 parts.
To view the series in its entirety, follow this guide:
- Part 1: Handling Immediate Matters
- Part 2: Gathering Documents and Funeral Planning
- Part 3: Notifying Accounts and Collecting Information
- Part 4: Tying Up Loose Ends
- Part 5: Taking Inventory
- Part 6: Decisions Regarding the Estate
- Part 7: Administrative Duties
- Part 8: Applying for Benefits (For Spouses/Beneficiaries)
- Part 9: Managing the Trust Account (If Applicable)
- Part 10: Distributing Assets
- Part 11: Filing Taxes
- Part 12: Finalizing the Estate
If you’ve reached this step in the checklist, you’re likely almost at the finish line! Acting as the executor of an estate can be gruelling, but it’s often rewarding when you’re able to act in service of a loved one.
As an executor, you are tasked with numerous responsibilities - almost all of which are financial in nature. That calls for accountability. As executor, you’re also accountable to the beneficiaries who are receiving the remains of the estate after expenses. At this stage in the process, you’ve likely accumulated records of all of the documents you’ve collected, taxes you’ve filed, assets distributed and the expenses incurred.
Now, it’s time to compile all of these things and finalize the estate.
Submitting final accounting
Final accounting is only done after all expenses have been paid, including income taxes.
There is no specific format for providing a statement of account. Organize details in a spreadsheet, ensuring you have original, hard copies of everything, as well as scanned soft copies. Back up your documents to avoid losing anything essential.
A well-organized statement of account is essential for transparency for beneficiaries, so they know their loved one’s money and assets (soon to be their money and assets) have been properly managed.
Executors need to be accountable to beneficiaries and take care to uphold the law in their work. You could be called upon to submit accounting details at any time.
The statement of account should include:
- List of all debts
- List of all assets, including both real and personal property
- List of all income earned by the estate, such as from the sale of property or interest from investments
- All expenses, as well as the date and purpose of those expenses.
- Reconciliation of expenses with the amount in the estate account.
- Distribution guidelines for the estate, typically per the will, including details about what each beneficiary receives
As the executor, you may be entitled to compensation for your work. To avoid any legal conflicts down the road, it’s best to have these discussions up front - while estate planning with your loved one before their death.
Often, the role of executor is played by a family or friend - which can make discussions around compensation difficult. However, when an estate is complex, it can be time-consuming and feel similar to an actual job. It’s generally accepted that executors are entitled to 5% of the estate’s value.
Any expectations of compensation need to be detailed in your statement of account for beneficiaries. Recompense for the executor may be determined by the probate courts.
Signing a release
As someone who is dealing with the finances of a loved one, on behalf of that person’s family and friends, you take on a certain amount of responsibility if anything goes awry.
A release is a binding contract which protects you as the executor from any potential lawsuits from beneficiaries.
There is no standard format for writing a release, however, it should include the following:
- Place for name of beneficiary
- Name of executor
- Name of the estate of the deceased
- Date of signing
- Language releasing the executor of future liability upon signing
If a beneficiary isn’t satisfied with the estate accounts, it’s unlikely they’ll sign this document. They are not required to sign the document in order to receive assets and money owed to them. Once releases are signed, they should be filed with the court to protect the executor in future.
Applying for release
If the estate is going through probate court, you’re likely ready to apply to be released from your executor duties.
Once accounting is complete and all of the assets of the estate have been distributed to beneficiaries, you can be relieved of your active role as executor.
Despite the fact the majority of your work as executor is complete, it’s important to remember that you will always be considered the executor of this particular estate. So, if issues arise, you may be called upon in the future. However, once discharged, you are no longer personally liable for how the estate was handled - with the exception of any illegal activity.
Stepping into the role of executor can be time-consuming and even tedious at times. But, when it’s done well, you are serving an important role in the lives of beneficiaries and honoring a loved one’s wishes.
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