Duties of an Executor

Contents

1. The role and its names
2. Finding everything
3. Notices, debts and the final return
4. The estate tax return
5. Portability and the nine month clock
6. Choosing the person
7. The asset that skips the executor

Brent O’Mara works with business owners and multigenerational families, and that work often reaches into business succession, where the person named to settle an estate can decide how a company changes hands. The job acquired its newest duty on January 1, 2011. From that date, the Internal Revenue Service explains, the estate of a person survived by a spouse may elect to pass any unused estate tax exemption to that spouse, but only on a timely filed estate tax return.⁴ The election belongs to the executor, which means that since 2011 a person who may have been chosen for being the oldest child has held a decision worth, in some families, more than the house.

The role and its names

An executor is the person a will names to carry it out. AARP’s guide to choosing one quotes an estate lawyer who likens the will to an instruction manual and the executor to the person who picks it up and is charged with executing it, and notes that some states use the term personal representative instead.¹ Nebraska is one of them: Revised Statute 30 2414 governs the application for informal appointment of a personal representative, which must identify the will by the date it was signed and set out the applicant’s priority to serve.³ A fellow of the American College of Trust and Estate Counsel summarizes the function in a video: to act on behalf of the estate, administer the assets, handle any claims and distribute as the document states, as a fiduciary bound to act in the beneficiaries’ interest.²

Figure

The executor's year

1. 01
   Locate the will and applyFind the document, then apply to the county registrar for appointment as personal representative.
2. 02
   NotifyReport the death to Social Security, banks, credit card companies, credit bureaus, utilities and the passport office.
3. 03
   InventoryFind every asset, from accounts and real estate to jewelry and online logins, and value each as of the date of death.
4. 04
   PaySettle debts and expenses, prepare the final income tax return, and determine any state inheritance tax.
5. 05
   File or electDecide whether a federal estate tax return is required, or worth filing anyway to carry unused exemption to a surviving spouse.
6. 06
   DistributeTransfer what remains to the people named in the will and account for it.

Finding everything

The first task is an inventory, and it is harder than it sounds. The author of a Kiplinger guide to estate planning told Marketplace that the executor must gather all the information about the estate, make sure debts are paid and see that everything is transferred properly, and that a will should give the executor enough information to find every asset; he recalled a woman whose jewelry was discovered only because a daughter happened to find it hidden in a bathroom.⁹ NPR’s guide to end of life planning adds the modern version of that problem, digital accounts, and suggests the person keep a secure list of logins and tell the executor where it is.⁸ AARP notes that some of the work is physical: sorting mail, getting into the house, preparing it for sale, which argues for an executor who lives nearby.¹

Notices, debts and the final return

Alongside the inventory runs a list of people to tell. USAGov advises reporting a death to banks, credit card companies, credit bureaus and other financial organizations, contacting utilities and places where the person held memberships, and returning the passport for cancellation to prevent identity theft.¹⁰ AARP’s list includes reporting the death to Social Security if benefits were being paid, paying outstanding debts, and working with an accountant on the final income tax return.¹ In Nebraska, as probate in Nebraska explains, the executor also sees that the county inheritance tax is calculated and paid before property passes.

Figure

Who to tell after a death

1. 01
   Banks and card issuersBanks, credit card companies and other financial organizations where the person held accounts.
2. 02
   Credit bureausSo that no new credit is opened in the name of the deceased.
3. 03
   Utilities and membershipsServices, subscriptions and memberships the person paid for.
4. 04
   The passport officeThe passport is returned for cancellation, which helps prevent identity theft.
5. 05
   Benefit agenciesSurvivors may be eligible for death benefits from the government.

The estate tax return

Few estates owe federal estate tax, but the executor must still decide whether a return is required. The IRS describes the tax as a tax on the right to transfer property at death, computed from an accounting of everything the decedent owned or had an interest in, valued at fair market value on the date of death rather than at cost, on Form 706.⁴ Deductions for debts, administration expenses and property passing to a spouse or charity reduce the gross estate to the taxable estate, lifetime taxable gifts since 1977 are added back, and the tax is then reduced by the unified credit.⁴ A return is required only when the gross estate plus adjusted taxable gifts exceeds the filing threshold for the year of death, and most relatively simple estates do not need to file.⁴ The threshold itself has an entry of its own.

Portability and the nine month clock

The duty added in 2011 is the one most easily missed. The Journal of Accountancy explained the mechanism when it was new: for the surviving spouse to use the deceased spouse’s unused exclusion, the executor of the first estate must make the election by filing a complete Form 706 within the time prescribed, even if no return is otherwise required.⁶ The return is due nine months from the date of death, with a six month automatic extension if requested within the first nine months.⁶ Accounting Today reported that many executors of people who died in early 2011 did not know the rule, so the IRS gave those estates until fifteen months after death if the estate was worth $5 million or less.⁷

Figure

Two deadlines for Form 706

	A return that is required	A return filed only for portability
Who files	Estates above the filing threshold	Estates below it with a surviving spouse
Due	Nine months after death	Nine months after death
Extension	Six months, by application	Six months, or up to five years under a 2022 simplified method
What it accomplishes	Reports and pays the tax	Passes unused exemption to the survivor

The problem persisted. In 2022 the journal reported that the IRS, still receiving numerous letter ruling requests from estates that had missed the deadline, issued a simplified method allowing an estate not otherwise required to file to make the election as late as the fifth anniversary of death, with a statement at the top of the Form 706 that it is filed under the new procedure.⁵ The relief does not help an estate that was required to file, and it does not extend the surviving spouse’s own refund claims.⁵ Everything above depends on individual circumstances, from the size of the estate to the family involved, so qualified professionals in tax, law and finance usually sit beside the executor through the year.

Choosing the person

The sources agree on temperament over birth order. AARP quotes a lawyer who says the ideal candidate is organized, meticulous and comfortable working with others, and that it may be the firstborn or the fifth or none of the children.¹ It recommends asking the person first, naming an alternate in case the first choice cannot serve, and limiting co executors to two, since getting three people to sign everything is like asking three people to drive one car.¹ The college video favors someone who understands finances or law, or failing that a peacemaker, and notes that a corporate fiduciary can serve when no family member fits or when the family is in conflict.² NPR’s guide suggests the direct question: would you be comfortable wrapping up my estate when I die?⁸ The document that creates the role is covered in what a will does.

The asset that skips the executor

One kind of property increasingly never reaches the executor at all. A house carried on a recorded deed that names who takes it at death passes by that deed, outside the will and outside the executor’s inventory, the moment a death certificate is presented. Nebraska allows it, and the mechanics, the recording, the way it can be undone during life, and the pitfalls for creditors and co owners, are the subject of the next entry, transfer on death deeds in Nebraska.