You’ve been appointed executor: now what do you do?
A loved one—relative or friend—has died with a will naming you as the executor. Or there is no will and the court has appointed you to be the “administrator” of the estate. Whether there was a will or not, whether you are called “executor” or “administrator” or your duties and liabilities as the personal representative of the estate are essentially the same.
The first thing to remember is that when the court appoints you as executor or administrator, you become an officer of the court and you assume certain duties and obligations by law. An attorney is best qualified to advise you about these duties and liabilities and help you with each step, but here is a simple guideline of what you will generally be expected to do:
1. INVENTORY THE ESTATE’S PROPERTY.
Locate all of the estate’s property. You must try to locate and take possession of all of the decedent’s property, including cash, bank accounts, investment accounts, real property and personal property.
Determine the value of the property. You must arrange to have a court-appointed referee determine the value of the property unless the appointment is waived by the court. You (not the referee) must determine the value of “cash items.”
File an inventory and appraisal. Within four months after “Letters” are issued to you as personal representative you must file with the court an inventory and appraisal of all of the assets in the estate.
File a change of ownership of real property. Along with filing the inventory and appraisal you must also file a change of ownership statement with the county recorder or assessor in each county where the decedent owned real property.
2. MANAGE THE ESTATE’S ASSETS.
Be prudent with investments. It generally takes some time before the estate’s assets will be distributed to the proper beneficiaries or heirs. While the assets are in your care you must manage them as a prudent person dealing with someone else’s property would. You must be cautious and not make any speculative investments. Except for checking accounts intended for ordinary administration expenses, estate accounts must earn interest.
Keep estate assets separate. You must keep estate money and property entirely separate from anyone else’s, including your own. A bank account for the estate must be in the name of the estate, not your own; similarly, securities and investment accounts must be held in a name that shows they are estate property.
Other restrictions. There are many other specific restrictions on your authority to deal with estate property, and consultation with your attorney is advisable concerning the legal requirements affecting such things as sales, leases, mortgages, and investments of estate property. Generally, you should not spend any of the money unless you have received permission from the court or your attorney has advised you that you may do so. You need a court order before you may fees to yourself or to your attorney.
3. GIVE NOTICE TO CREDITORS.
Decedent’s creditors must be notified of Decedent’s death and that that the estate assets are being administered. You must mail a “notice of administration” to each known creditor within four months after your appointment. If Decedent received Medi-Cal assistance you must notify the Director of Health Services within 90 days of your appointment.
4. MAINTAIN INSURANCE.
You should determine that there is appropriate and adequate insurance covering the assets and risks of the estate and keep it in force during the entire period of administration.
5. KEEP RECORDS.
Keep complete and accurate records of each financial transacting affecting the estate. In order to wrap up the estate and distribute the assets you will have to prepare and file with the court an account of all money and property coming into the estate, what you spent, and the date of each transaction, and describe in detail what is left. The court and any interested parties will be able to review your account, and assets generally may not be distributed until your account is approved.
6. CONSULT AN ATTORNEY.
An attorney can help you with all of these steps. His or her compensation for ordinary services in connection with estate administration is set by statute (as is yours), and will be paid out of the estate. Cooperate with your attorney, and when in doubt, call him or her and follow their advice.
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