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In a previous post, I wrote about fiduciaries, what they are and how they function in your estate plan. I covered Powers of Attorney and Powers of Medical Attorney. In this post, I am going to discuss the Executor. The primary difference between an agent under a power of attorney and an Executor is that your agent works on your behalf while you are still alive. An Executor’s duties begin once you have passed and need to have your estate finalized.
Your Executor plays a crucial role as the person that ultimately settles your affairs. The Executor will be called upon to identify and collect assets, pay debts, and distribute the remaining assets to your beneficiaries. Each of these duties includes numerous responsibilities. For example, collecting the assets includes identifying all financial accounts, real estate, personal property, household furnishings, etc., and creating an inventory for the court that includes the items and their current value. The inventory has to be detailed enough that the court knows the extent of the estate.
The Executor is responsible for paying funeral costs and taking care of taxes on the estate. The Executor will terminate the utilities, cancel credit cards, and notify banks, social security, and the post office of your passing. They will also receive any claims filed by creditors of the estate and will have the responsibility to approve or deny the claims. The Executor will then pay the debts of the estate. If the debts exceed the estate, then the assets are distributed according to the methods laid out in the Texas Probate Code. This could require engaging the court to help sort it out.
Finally, the Executor will distribute all remaining assets to your beneficiaries as per your will. If you die without a will, your assets are distributed as per the provisions in the Texas Probate Code. To assist in getting this together, the Texas Probate Code allows an Executor to pay for professional services (such as accountants, appraisers, and a probate attorney) out of the estate.
Ultimately, the probate process in Texas can be relatively straight-forward for someone who is well-organized and can meet deadlines. Though there is a court hearing required to approve your choice of Executor, if there are no contests or other complications, the Executor’s time in court will be brief.
In general, your Executor should be someone who is detail-oriented and not intimidated by paperwork or deadlines. An Executor should also have basic common sense and be able to know when it’s time to hire a professional to assist in administering the estate. A probate attorney represents the Executor and will help guide the Executor through the process. Your Executor should be someone willing to listen to advice, but who is not afraid to do research and ask questions when needed.
The person you name as Executor should be of an appropriate age and good health and be available. If at all possible, name a local Executor to ease the process. You should always talk to the person you want to name ahead of time to make sure that they are comfortable with this responsibility. If no family member fits the bill, banks sometimes offer estate services for a fee. In some cases, this may be the best solution for executing your wishes. When I create an estate plan for my clients, helping them select an appropriate Executor is always part of the process.