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What are the responsibilities of an Executor?

Posted on January 12, 2021

When it comes to the role of executor - responsibility is the key word. This role has many - and it calls on the executor to be as diligent and thoughtful as possible.

After a death, that’s when an executor steps in to take on all of the legal and financial tasks typically owned by the deceased. That’s why it’s so important to choose the right person as your executor.

If you have been named an executor, here are some of the responsibilities you can expect to take on.

  • Find Documents
  • Manage Funeral Arrangements
  • Find and Notify Beneficiaries
  • Manage the Deceased’s Property
  • Organize and Settle Debts
  • File Tax Returns
  • Distribute Assets
  • Keep Records

We’ll explore each of these responsibilities in depth.

What is an executor?

An executor is first and foremost an administrator. They become responsible for all of the legal tasks of the deceased, like selling property, dealing with finances or distributing assets.

The right executor will be organized and thorough, with the ability to diplomatically handle family matters and distribute assets to the intended beneficiaries.

In order to administer the estate, the will must be probated. That means the executor must be able to prove they have the legal right to administer the estate.

Finding documents

The first thing an executor needs to do is locate the will. The will determines beneficiaries and disbursement of their assets and possessions. In an ideal situation, an executor will know where the will, along all of the essential financial and legal documents are.

An executor must use reasonable efforts to locate the last will of the deceased. This means ensuring the copy of the will they have access to is the most recent will made.

If only a copy of the will is found, the executor should check with the lawyer who prepared the original will. The laws around wills and the responsibilities of an executor do vary by province, so you may need a Will Search Certificate or to look for a Will Notice, depending on the region.

Managing funeral arrangements

Funeral arrangements are typically made by family members or close friends.

However, funeral arrangements come with a cost. That’s where the executor has the legal authority to make decisions around planning the funeral in accordance with the estate. The wishes of the deceased should also be considered, though funeral instructions outlined in a will are not legally binding.

It is up to the executor to determine if the wishes of the deceased align with the estate’s finances.

Finding and notifying beneficiaries

Keeping beneficiaries informed is an essential responsibility of the executor. Right away, let them know that you’ve taken on the responsibility as executor. File the will and ensure all assets are accounted for.

You should keep in close communication with beneficiaries and keep them informed of the timeline for distributing assets, possessions and property.

As an executor, you can be named a beneficiary of a will. Though, the executor has a legal responsibility to treat all beneficiaries fairly under the directions outlined in the will. There are also additional considerations if a beneficiary is a minor or deemed mentally unfit.

Manage the Deceased’s Property

As the executor, you do have a responsibility to ensure the deceased’s property and assets are cared for - this includes dependents and pets, too.

It falls on the executor to ensure the home is secure and guarded against potential trespassers, as well as ensure other hazards are removed. For example, ensuring the home is properly heated in the winter or security measures are being taken to ensure the home doesn’t appear vacant.

These tasks can fall to family members or friends, but it’s important for the executor to take charge and delegate these accordingly.

Organize and Settle Debts

Executors aren’t free to give any property or assets away until all of the deceased’s debts have been settled. That means making sure that all of the following are paid:

  • Credit cards
  • Bank loans
  • Car payments
  • Etc...

This includes outstanding mortgage payments, which are usually taken care of by selling the property or passing the property along to a beneficiary.

If debts outweigh assets, the estate may be subject to the provincial or territorial laws that allow creditors to drain assets entirely as compensation. This means that beneficiaries receive nothing, but at least they will not have to pay back debts on behalf of the deceased.

It’s worth noting that debts that are shared (such as a joint credit card or co-signed mortgage) are not considered debts of the deceased. If they are shared with someone who is still living, those debts will become theirs.

File tax returns (Canada)

The executor is required to file the T1 final tax return for all income earned in that year by the deceased, up to the date of death.

The due date for the tax return and subsequent payments depends on the date of death. If the death occurs between January 1 and October 31, the final return is due by April 30 of the following year. If death occurs between November 1 and December 31, the final return is due six months after the date of death, according to the Canada Revenue Agency.

The deceased's final tax bill is dependent on the assets owned at the time of death, the value of those assets, who the beneficiaries are, and the deceased’s income for that final year. For example, money given to a charity may be tax exempt.

An executor typically waits for a Tax Clearance Certificate from the CRA before giving beneficiaries their shares of the estate. This stems from the fact that assets cannot be given out until all debts and taxes are paid. This certificate is proof that nothing is left owing by the estate.

File tax returns (USA)

The deceased person’s income will be taxed, no different than if they were still living. The same tax rates apply, as well as the same deductions.

As the executor, you need to make mention of the word DECEASED at the top of Form 1040, along with their name and death of death. Complete the remainder of the form with the deceased’s personal information.

Since you will be completing this tax return on someone else’s behalf, you need to complete IRS Form 56 and attach it to the final Form 1040. If the deceased is eligible for a refund, you need to file Form 1310 in order to receive it on their behalf.

Tax returns aren’t always required in the United States for a deceased person.

If their income was less than about $12,400USD for someone who was single and under 65, and less than about $24,800USD for someone who was married filing jointly - there is no need for an executor to file a federal income tax return. The IRS has the most up-to-date information and we recommend checking information from your state’s taxing authority to confirm the minimum threshold for taxes.

In the event of a surviving spouse, it is their responsibility to file the tax return.

Distribute Assets

The will is your go-to guide for distributing assets. In cases where the will is very direct and specific, follow the will and give beneficiaries what they outlined.

Unfortunately, this is one of the most stressful times for executors. Getting a portion of the estate, or even an item of sentimental value, can bring family feuds to the surface. This adds pressure to the executor.

You can combat this by taking a thorough inventory of assets very soon after the deceased passes. This enables you to know everything, from money to household items, that need to be divided up and distributed. Family members may feel entitled to certain items and may even take them right away. If a valuable item is taken and the person refuses to return it, you may need to bring in legal help to have the item returned.

The beneficiaries can request an informal inventory of the assets. If they aren’t satisfied with the response, they are also able to bring in legal assistance.

To make the process go smoothly, it’s recommended to stay in communication with beneficiaries and follow the will. In ideal situations, key possessions or items of personal significance will be given away by the deceased before their death to prevent infighting.

At the end of the day, it’s up to the executor to distribute assets, even if the will hasn’t designated specific beneficiaries for everything.

You should exercise discretion and be impartial, while trying to maintain as much equity as possible among beneficiaries. Dividing up estates can be litigious, so approaching this part of the process delicately is essential.

The majority of estates are closed within a year of the deceased’s date of death.

Keep records

Often, executors will incur expenses while administering the estate.

Keep track of these expenses, as they will need to be deducted from the estate. You also need to keep records of all of the debts that are settled and taxes that are paid. Solid record keeping is the best way to get a complete picture of what remains in the estate and what can be given to beneficiaries.

Your inventory of the assets and possessions belonging to the deceased, as well as which items have been given to beneficiaries is another important document to keep up-to-date.

There are many responsibilities that fall to executors. It’s not always an easy task. But, the right outlook, diligence and diplomacy can make the most challenging situations go more smoothly.

Author(s): My Coda's Editorial Team

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