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Duties of An Executor Or Personal Representative

An Executor or Personal Representative is the individual or entity or combination of the two appointed by a testator in his or her Will whose duty it is to administer the estate. The administration process usually lasts from two to three years after the death of the decedent. The following are highlights of the numerous duties of an Executor or Personal Representative:

Arrange for the Probate of the Will and Take Preliminary Steps
• Locate Will. If the original cannot be found, obtain a court order to open safe deposit box in order to determine if Will is located in the box. A copy may be used in certain limited circumstances.
• Select an attorney to represent the Executor or Personal Representative.
• Assist attorney in probating the Will.
• Notify post office to forward mail to Executor or Personal Representative.
• Open estate account.
• Notify banks, investment brokers and others of the appointment. Collection of Assets and Payment of Bills
• Search for assets of decedent by going through decedent’s income tax returns, mail files and records.
• Obtain copies of all bank statements, brokerage statements, cancelled checks and income tax returns for the last three full years of decedent’s life and the year of death.
• Open safe deposit box and inventory contents of box.
• Establish values for all stocks and bonds and all other assets as of decedent’s date of death.
• Ascertain requirements for collecting assets from each bank and brokerage firm and collect all assets of decedent, including checking, savings and brokerage accounts and deposit all proceeds in estate account.
• Collect all assets payable to the decedent or estate, including retirement plans and insurance.
• If applicable, notify Social Security Administration and Veterans Administration of death, seek any death benefits payable, and refund any payments made after the date of death.
• Assist in the collection of assets payable to others, including joint bank accounts, trust accounts, retirement accounts and insurance.
• Review all real estate owned by decedent and leases and mortgages thereon.
• Arrange for appraisals of all real estate owned by the decedent as of the date of death.
• Review all insurance policies relating to real estate and tangible personal property owned by decedent and arrange for transfer to estate name.
• Secure real estate of decedent (change locks if necessary) and secure tangible personal property therein.
• Arrange for appraisals of all tangible personal property owned by the decedent as of the date of death.
• If applicable, meet with all household employees of decedent and assist in termination or maintenance of employment.
• Ascertain if any gifts were made by the decedent within three years of death that must be reported and/or for which gift taxes must be paid and obtain copies of all gift tax returns filed by decedent during his life.
• Review all debts of decedent and pay those debts that are due and owing. Debts must be paid in a timely manner.
• If decedent died in such a manner that could give rise to a cause of action for wrongful death, retain an attorney to commence the lawsuit.
• Value all business interests of decedent (including closely-held businesses and investment businesses).

Investment of the Estate
• Review estate assets and invest estate assets in such a manner as to comply with the Prudent Investor Act.
• Determine cash requirements of estate and sell assets to raise any necessary cash for debts, administration expenses, taxes and cash bequests.
• Manage all real estate owned by decedent and make decisions concerning the sale or transfer of the real estate.
• Keep detailed records of all estate financial transactions.

Tax Planning
• Make all applicable tax elections, determine whether to use alternate valuation of assets as of six months from date of death and select a fiscal year for the estate.
• Prepare and file decedent’s final federal and state income tax returns and gift tax returns and pay any taxes due; prepare and file any employee returns.
• Prepare and file estate’s federal and any state estate tax returns and pay any taxes due.
• Prepare and file annually the estate’s federal and state fiduciary income tax returns
and pay any taxes due.
• Prepare for any audit on any of the above-mentioned returns.

Distribute Assets of the Estate
• Pay specific bequests of cash and property to the beneficiaries.
• Make partial distributions to the residuary beneficiaries as the estate administration progresses.
• Analyze whether to pay legacies under the Will immediately or to wait seven months to a year to pay such legacies depending on state creditor claim statutes.
• Distribute all tangible personal property specifically bequeathed under the Will.
• Arrange for the preparation of Receipts and Releases for signature by the beneficiaries when making distribution of any property.
• Arrange for the preparation of a final accounting for the estate showing all assets and income collected and expenses paid, all investments and reinvestments, including gains and losses, all distributions made, and other pertinent information concerning the administration of the estate, which is rendered to the residuary beneficiaries.
• Make final distribution of assets in accordance with the terms of the Will. These are just some of the duties required of an Executor or Personal Representative. To determine the full extent of an individual state’s requirements of an Executor or Personal Representative, one should review current applicable law.

In summary, an Executor or Personal Representative has enormous responsibilities in valuing, collecting and ultimately distributing a decedent’s assets. Because of these responsibilities, it is important for the testator nominating an executor in his or her Will to name a person or entity that can handle the job and do so diligently and efficiently. It is also important to consider whether a corporate fiduciary would be more appropriate to act as an Executor or Personal Representative given the facts of a particular estate plan, i.e., difficult assets to value and distribute or difficult family relationships. All these factors would have to be taken into account when nominating any Executor or Personal Representative.

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