Chapter 12: The Executor's Job — What It Actually Involves

The hardest volunteer job in America

Being named executor of an estate sounds honorable when you agree to it. Yes, I'll take care of things if anything happens to Mom. Two decades later, when Mom dies, you discover what you actually agreed to. And it is not honorable. It is tedious, emotional, legally fraught, and takes eighteen months of your life.

This chapter is what you signed up for, in plain English. If you have been named executor (or "personal representative," the same role under a different name in some states), this is your job description. If you are picking an executor, this is what you need to know before you name somebody.

The one-paragraph summary

The executor gathers all the assets of the estate, pays all the debts of the estate, files the final tax returns of the decedent and the estate, and distributes whatever is left to the beneficiaries according to the will (or according to state law if there's no will). This takes six months to two years for a typical estate. The executor is a fiduciary — meaning they have a legal duty to act in the estate's best interest, not their own — and can be held personally liable for mistakes.

That's the job.

The detailed list of responsibilities

Here is what "gathers all the assets" actually involves.

Phase 1: Get legal authority (weeks 1-4)

The will is not self-executing. Until a court formally appoints you as executor, you have no legal authority to act on behalf of the estate. This initial appointment is called "receiving letters testamentary" (if there's a will) or "letters of administration" (if there's not).

Steps:

• File the will with the probate court in the county where the deceased lived.
• File a petition to be appointed executor (usually the same document).
• Attend a brief court hearing (may be waived in simple cases).
• Receive letters testamentary — the one-page document that gives you legal authority.

With your letters, you can now:

• Open bank accounts in the estate's name
• Access safe deposit boxes
• Speak with financial institutions on behalf of the estate
• Sign documents for the estate
• Sell estate property (with court approval in some cases)

Some states allow simplified procedures for small estates. Some states allow "independent administration" that reduces court involvement. Some require every action to be court-approved. Your attorney will advise.

Phase 2: Inventory the estate (weeks 4-12)

You must identify and value everything the deceased owned. This is the inventory.

Assets to inventory:

• Real property (houses, land)
• Vehicles
• Bank accounts (checking, savings, CDs)
• Brokerage accounts and individual stocks/bonds
• Retirement accounts (though these usually bypass probate via beneficiary designations)
• Life insurance (also usually bypasses probate)
• Business interests
• Personal property (furniture, jewelry, art, collectibles)
• Intellectual property (copyrights, patents, royalties)
• Digital assets (Chapter 9)
• Outstanding debts owed TO the deceased (loans, receivables)
• Expected refunds (tax refunds, insurance refunds)

For each asset, document:

• Description
• Location
• Value as of date of death (this is when step-up basis is calculated)
• How it's titled / who else has an interest

File the inventory with the court by the deadline (varies by state, often 60-90 days).

Phase 3: Notify creditors (weeks 4-16)

The estate is responsible for paying the deceased's debts out of estate assets. You must notify known creditors and publish notice to unknown creditors.

Steps:

• List known creditors: mortgage, utilities, credit cards, medical bills, taxes.
• Publish notice in a local newspaper (requirements vary by state).
• Creditors have a window (usually 3-6 months) to file claims.
• After the window, unclaimed debts are generally barred.

Phase 4: Pay debts in order of priority (ongoing)

Debts must be paid in the order priority set by state law. Typical order:

1. Funeral and burial expenses
2. Estate administration expenses (attorney fees, executor fees, court costs)
3. Federal and state taxes
4. Hospital/medical expenses from last illness
5. Secured debts (mortgage, car loan)
6. Other unsecured debts (credit cards, personal loans)
7. Finally, distributions to beneficiaries

Critical point: do NOT distribute to beneficiaries until debts are paid. If you distribute early and then find out there are more debts, you may be personally liable to pay them.

Phase 5: File taxes (throughout, with a final deadline)

Two distinct tax filings:

Deceased's final individual tax return (Form 1040). Covers the period from January 1 to date of death. Due by the normal April 15 deadline for that tax year.

Estate's income tax return (Form 1041). The estate is a separate taxpayer. It files income tax returns for the period from date of death until the estate is closed. Generally due April 15 following the end of the fiscal year the executor chooses.

Estate tax return (Form 706). Only required if the estate exceeds the federal exemption ($15M per individual / $30M per married couple effective 2026 after OBBBA, indexed annually). Most estates do not owe federal estate tax. Some states have their own estate or inheritance taxes at lower thresholds (Massachusetts and Oregon are the lowest at ~$2M and ~$1M respectively). Due 9 months after death; extension to 15 months available on request.

A CPA who specializes in estate taxation is invaluable. Their fees are paid by the estate.

Phase 6: Distribute (months 9-18)

Once debts are paid and tax obligations are settled, distribute the remaining assets to beneficiaries per the will.

Steps:

• Prepare a final accounting (every dollar in, every dollar out).
• Get beneficiary sign-offs on the accounting (required in some states).
• Transfer assets: deed the house, transfer the car title, cut checks, transfer securities.
• Get receipts from each beneficiary.

Phase 7: Close the estate (months 12-24)

• File final documents with the court.
• The court formally closes the estate.
• Your executor role ends.

Most estates take 9-18 months from death to closing. Complex estates (contested, large, involving businesses, or with tax issues) can take 3-5 years.

The executor's compensation

Executors are entitled to reasonable compensation for their work. The amount varies:

Statutory fee states. Some states have a statutory fee (often 2-5% of the estate value, sometimes on a sliding scale). Executor takes this automatically.

Reasonable fee states. Some states allow "reasonable compensation" without specifying. Usually 1-5% depending on complexity.

Will-specified. Some wills specify a fee (e.g., "executor to receive $50,000 for services").

Waived. Family members often waive the fee, especially if they are also beneficiaries (tax reasons — beneficiary share is tax-free; executor fee is taxable income).

Consideration: the fee is taxable as ordinary income. A beneficiary's inheritance is not. If you are a beneficiary AND executor, waiving the fee is often tax-advantageous if the fee would have come out of your share anyway.

The fiduciary duty — what "liable" really means

As executor, you have a legal duty to:

• Act in the estate's best interest (not yours, not any specific beneficiary's).
• Act with reasonable care, skill, and caution.
• Avoid conflicts of interest.
• Keep good records.
• Treat beneficiaries fairly.
• Comply with the will and with applicable law.

Violations can include:

• Self-dealing (selling estate property to yourself below market)
• Negligence (letting estate property deteriorate or lose value)
• Commingling (mixing estate money with your own)
• Improper distributions (paying yourself or one beneficiary before debts)
• Misrepresentation to beneficiaries or the court

Consequences can include:

• Removal by the court
• Surcharge (personal liability for losses to the estate)
• Loss of executor fee
• Criminal prosecution in cases of actual fraud
• Lawsuits by beneficiaries

Most executors are not sued. But the threat is real enough that you should take the job seriously. Keep good records. Don't touch money. Get professional advice. Follow procedures.

Critical missteps that get executors sued

I have watched well-meaning executors get personally sued because they didn't realize the law held them to a higher standard than the average family member. Avoid these:

Commingling estate funds with personal funds. Open a dedicated estate bank account (using the estate's EIN, which you get from the IRS Form SS-4) and route every dollar through it. Do NOT deposit estate checks into your personal account, even briefly. This is the single most common executor mistake and it creates personal liability.

Paying yourself before the creditors are notified and the claim period has run. You may be legally entitled to executor compensation, but it gets paid LATE in the process, after creditor claims have been resolved. Pay yourself early and a creditor surfaces — you may owe that money back personally.

Distributing to beneficiaries before tax returns are filed and creditors notified. If you hand out the estate and then a tax bill or creditor claim shows up, the executor (you) is personally responsible for what was distributed wrongfully. Hold a reserve until tax-return filing or the creditor-claim period has run, whichever is later.

Failing to take the IRC §645 election. This election, made on the estate's first 1041, allows the executor to treat a revocable trust as part of the probate estate for tax purposes. Often saves the family meaningful tax. Ask the CPA.

Failing to obtain a Closing Letter or Account Transcript before final distribution. For estates that file Form 706, the IRS issues a closing letter (or account transcript via Form 4506-T) confirming that the estate-tax return is accepted. Distributing before this can leave you personally on the hook if the IRS later challenges the return.

Not filing the IRS Notice of Fiduciary Relationship (Form 56). This puts the IRS on notice that you, not the decedent, are now responsible for the estate's tax matters. Without it, IRS notices may go to the wrong address.

Acting as the realtor / agent / attorney for the estate without proper disclosure. If you're a licensed realtor and you list the estate property using your firm — disclose to all beneficiaries IN WRITING and confirm consent. Same goes for any professional service you provide to the estate. Self-dealing is the executor sin par excellence.

Failing to keep contemporaneous records. Every check, every email to beneficiaries, every decision rationale — write it down at the time. If a beneficiary later challenges your conduct, the contemporaneous record protects you. Reconstructed-after-the-fact notes don't.

Selling estate property without documented FMV at date of death. Without a contemporaneous appraisal or comparable sales documentation, the basis is anchored to whatever the IRS chooses to challenge it with. Get a written appraisal for any real property, business interest, or significant collectible — even if no estate tax is owed.

Forgetting Form 706 portability filing. If a married couple's combined estate is below the federal exemption, the surviving spouse doesn't owe estate tax — but the executor of the first-to-die spouse should file Form 706 to elect portability of the unused exemption to the surviving spouse. Miss this and the surviving spouse may owe tax at their own death that could have been avoided. Form 706 is due 9 months after death; an extension to 15 months is available. Beyond that, a late-portability election can sometimes be made within 5 years under Rev. Proc. 2017-34.

When to hire professional help

Not every estate needs a team of professionals. But most benefit from some help.

Hire an estate attorney if:

• The estate is going through probate (most estates without a trust).
• There are any contested matters (heirs disputing, will challenges).
• The estate has significant complexity (business interests, out-of-state property, tax issues).
• You are uncertain about a legal question.
• The state requires attorney involvement for probate (some do).

Attorney fees vary widely. Hourly ($250-$600), percentage of estate (2-5%), or flat fee for simple matters. Fees come from the estate, not from your personal funds.

Hire a CPA if:

• There are complex tax situations (business, capital gains, multi-state).
• The estate or deceased had any tax complexity.
• You need help with Form 1040 (final individual), Form 1041 (estate income), or Form 706 (estate tax).

Hire a financial advisor if:

• There are significant investment portfolios to manage during administration.
• Beneficiaries need help with inherited accounts (different advisor from the one managing the estate, typically).

Hire an appraiser if:

• There's real estate, business interests, fine art, jewelry, or other assets that need valuation for step-up basis or estate tax.

Hire a realtor (like me) if:

• There's real estate to sell.

You don't need all of these. A simple estate with a house, some investments, and clear beneficiaries may only need an attorney and a CPA. A complex estate may need all of the above.

Record-keeping: your single most important ongoing task

As executor, you will be second-guessed. Maybe by a disgruntled beneficiary. Maybe by the court. Maybe by a creditor. Maybe by a tax authority. Your defense is your records.

Keep:

• Every bank statement for the estate account.
• Every receipt for estate expenses (funeral, attorney, repairs, taxes, etc.).
• Every communication with beneficiaries (email preferred for the paper trail).
• Every decision memo — when you made a significant judgment call, note why.
• Every appraisal, valuation, and professional opinion.
• A running ledger of estate income and expenses.

I recommend a dedicated folder (paper or digital) for the estate administration, sorted by category. Keep it for at least 7 years after the estate closes — the IRS can audit that long.

Communicating with beneficiaries

Beneficiary communication is an underrated part of the executor's job. Poor communication is the #1 cause of beneficiary disputes.

Best practices:

• Communicate regularly. Monthly or quarterly updates on progress. Do not let beneficiaries wonder what's happening.
• Be transparent about the timeline. "I expect the estate to take about 12-14 months to close." Set expectations early and update when they change.
• Share the accounting. Most states require this formally; do it informally first.
• Acknowledge the emotional dimension. Beneficiaries are grieving too. Cold, purely administrative communication reads as dismissive.
• Document important communications in writing. "Per our phone call on Tuesday, we agreed X."

Worst practices:

• Silence. Going months without updates.
• Defensiveness. Treating every question as a challenge.
• Picking favorites. Talking more to one beneficiary than others.
• Making promises you cannot keep. "You'll have your distribution by June" when you actually don't know.

The co-executor question

Some wills name co-executors. This is sometimes good, often not.

Advantages of co-executors:

• Shared workload.
• Check and balance (two eyes, harder to go off-track).
• Sometimes required for large estates.

Disadvantages:

• Both must agree on every action (or the will must specify what happens when they disagree).
• Slower decisions.
• Potential conflict between co-executors.
• Each co-executor is generally liable for the other's actions.

If you are one of multiple co-executors and you have concerns, get them resolved early. Consider asking the court to designate one primary executor if the other isn't carrying their weight.

When to decline or resign

You are allowed to decline the executor role, even if you previously agreed to take it. This is called "renouncing." File the renunciation with the court; the alternate (named in the will) or next-of-kin becomes executor.

Reasons to decline:

• You're geographically far from the estate and can't manage effectively.
• You have a health condition that limits your capacity.
• You have a conflict of interest (you're a major creditor of the estate).
• You have a personal conflict with beneficiaries that will make the job impossible.
• You just don't want to.

You can also resign partway through if circumstances change. More complicated, but possible.

If you're uncertain whether to accept, talk to an attorney before accepting. Once appointed, resigning is harder than declining initially.

Common mistakes executors make

From my observation:

1. Commingling funds. Depositing estate checks into their personal account. Always, always keep a separate estate bank account.

1. Paying debts out of order. Paying credit cards before taxes or administrative expenses, and then finding the estate can't cover priority claims.

1. Distributing too early. Before creditor claim period is over or taxes are filed. Can leave executor personally on the hook.

1. Not getting appraisals. Leading to tax problems later or beneficiary disputes over value.

1. Mismanaging estate assets. Letting the house deteriorate, failing to collect rent, failing to pay estate taxes on time.

1. Bad communication. Going silent for months, then dropping a complex distribution on beneficiaries without explanation.

1. Making distribution promises. "You'll have your share by June" when they don't actually know.

1. Not documenting decisions. Making judgment calls that look self-serving in retrospect, without notes about why.

1. Not hiring help. Trying to DIY a complex estate when professional help would have saved time and money.

1. Mixing grief and administration. Making decisions while emotionally compromised. Slow down. Sleep on things.

What to do if you're choosing an executor (not yet named)

If you're the one planning your estate and trying to decide whom to name as executor:

1. Start with fitness for the job, not relationships. Executor is a job, not an honor. Pick who is organized, responsible, trustworthy, and available.

1. Pick local if possible. Out-of-state executors face real logistical problems.

1. Pick someone calm under pressure and with the emotional bandwidth to deal with beneficiaries.

1. Name a backup (and a backup to the backup).

1. Ask the person before naming them. Confirm they're willing.

1. Give them a copy of your relevant documents or at least tell them where to find them.

1. Consider a professional executor (a bank's trust department, or an attorney) if:

• The estate is complex.
• No family member is well-suited.
• Family dynamics are contentious.
• You want formal neutrality.

Professional executors charge 1-5% and produce consistent results. They are often worth considering for estates with significant assets or complexity.

What to do this week

If you have just been appointed executor:

1. Hire an attorney if you don't already have one. Today.
2. Open a dedicated estate bank account. Put all estate funds through it.
3. Begin the inventory. You don't have to finish it this week, but start.
4. Contact beneficiaries with a brief introduction and preliminary timeline.
5. Gather professional help — CPA, financial advisor, appraiser, realtor as needed.
6. Set up a record-keeping system (paper folder or digital folder) for the estate.

If you are named as executor in a will but the person is still alive:

1. Confirm with the testator you know where the will and key documents are stored.
2. Ask them to walk you through what assets exist and where they're located.
3. Meet their financial advisor / CPA / attorney if possible so you have relationships in place.
4. Understand the general plan so you're not blindsided when the time comes.

If you are planning your estate and choosing an executor:

1. Reassess whether your named executor is still the right choice.
2. Talk to them about the job. Confirm willingness.
3. Consider a professional executor if your situation warrants.
4. Name backups.

Next chapter: probate — what it is, why everyone wants to avoid it, and how long it actually takes in practice.