Serving as executor of an estate means navigating a multi-step legal process that can span months or even years. Understanding each phase of probate helps you fulfill your responsibilities efficiently and avoid costly mistakes. Following the proper sequence of steps ensures the estate is administered correctly and protects you from personal liability as executor.
Filing the Initial Petition
Probate begins when someone files a petition with the probate court in the county where the deceased resided. If there is a will, the petition asks the court to admit it to probate and appoint the named executor. The original will must be filed with the court, not a copy, so locating this document is essential before beginning the process.
Along with the petition, you typically must file a death certificate and pay filing fees. The court may require additional documents such as a list of heirs, an estimate of estate value, or consent forms from beneficiaries. Each state has specific forms and requirements, so obtain the correct paperwork from the local probate court or an attorney.
Notifying Interested Parties
After filing, you must notify all interested parties that probate has begun. This includes beneficiaries named in the will, heirs who would inherit under intestacy law, and known creditors. Notice requirements vary by state but typically involve mailing formal notices and sometimes publishing notice in a local newspaper to alert unknown creditors.
Proper notification is critical because it starts deadlines running for creditor claims and will contests. Failing to provide required notice can invalidate actions taken during probate or extend the timeline. Keep proof of all notices sent, including certified mail receipts and publication affidavits.
Receiving Letters of Authority
Once the court approves your appointment, you receive letters testamentary or letters of administration that authorize you to act on behalf of the estate. These letters are essential for accessing accounts, transferring property, and conducting estate business. Financial institutions, title companies, and other third parties will require certified copies before working with you.
Order multiple certified copies of your letters because you will need them throughout the process. Some institutions keep the copies you provide, requiring you to obtain more. Letters typically remain valid for a limited period and may need to be renewed for extended probates.
Inventorying and Valuing Assets
One of your first duties is creating a complete inventory of estate assets. This includes real estate, bank accounts, investments, vehicles, personal property, business interests, and any other assets the deceased owned. Document everything with account numbers, descriptions, and locations. You may need to search through records, contact financial institutions, and examine property to identify all assets.
Assets must be valued as of the date of death for probate and tax purposes. Bank accounts and publicly traded securities have readily available values. Real estate, businesses, and unique personal property may require professional appraisals. The inventory and appraisals must be filed with the court, typically within a few months of your appointment.
Managing Estate Assets
Throughout probate, you must prudently manage estate assets. This includes maintaining insurance, paying ongoing expenses like property taxes and utilities, collecting debts owed to the estate, and managing investments appropriately. You have a fiduciary duty to preserve asset value for beneficiaries rather than taking unnecessary risks.
Open an estate bank account for managing funds. Deposit any cash, checks, or income received by the estate into this account. Pay estate expenses from this account and maintain detailed records of all transactions. Keeping estate funds separate from personal funds is essential for proper accounting and avoiding liability.
Handling Creditor Claims
Creditors have a limited time to file claims against the estate after receiving notice or publication. Review each claim carefully to determine if it is valid. You can accept valid claims, reject invalid ones, or negotiate settlements. Rejected claims may result in litigation if the creditor pursues the matter.
Pay valid claims from estate assets according to the priority established by state law. Typically, administrative expenses and funeral costs have highest priority, followed by taxes, secured debts, and then general creditors. Do not distribute assets to beneficiaries until the creditor claim period has expired and all valid claims are resolved.
Filing Tax Returns
Estates have various tax obligations that must be addressed. You must file the deceased's final personal income tax return covering income through the date of death. The estate itself may need to file income tax returns for any income earned during administration. Estates above federal thresholds must also file estate tax returns.
Tax issues can be complex, particularly for larger estates or those with business interests. Consider working with an accountant or tax attorney to ensure all returns are filed correctly and on time. Obtaining tax clearance before making final distributions protects you from personal liability for unpaid taxes.
Distributing Assets and Closing
After debts are paid and tax obligations satisfied, remaining assets can be distributed to beneficiaries according to the will or intestacy law. Prepare a final accounting showing all assets received, expenses paid, and proposed distributions. Beneficiaries typically must approve this accounting or the court must review it before final distribution.
Once distributions are complete, file a final report with the court and petition for discharge as executor. The court's approval of your final accounting and discharge releases you from further obligations and liability. Keep copies of all probate documents indefinitely in case questions arise later.