Duties of an Estate Executor in California - Werner Law Firm
Duties of an Estate Executor in California | Werner Law Firm

Duties of an Estate Executor in California

The executor of a will has an incredibly difficult and important job – to see to it that the contents of your will are respected, within the constraints of the law and their abilities as executor of your estate.

When you pass away and become the decedent of your estate, whoever you chose as executor has to step up to the challenge and seek a formal appointment to the position by a court in California. Only then, when they have been approved for the position, will they be able to execute your will.

The two figures most involved in dealing with the responsibilities of the probate process and the execution of the will are the estate’s executor and the estate’s attorney. Executing a will is a multi-step process, one that requires resourcefulness, meticulousness, and an eagerness to do the job right.

When a person passes away, and their will goes into effect, the responsibilities of a chosen estate executor begin.

Becoming an Estate Executor

The first thing on an estate executor’s agenda is getting the probate process started. Probate is the process by which a special probate court investigates a person’s will and determines its legitimacy. The probate process also exists to facilitate a place for negotiation and communication between beneficiaries to prevent disputes or settle them. Debtors seeking a cut from the estate must also file a claim to be addressed in the probate process.

In other words, probate is the lengthy process by which a will is confirmed to be legitimate, and must then be executed. For some shorter wills and smaller estates, this is an expedited process that takes barely any time. In other cases, however, the probate process can more than a year of a person’s time. In California, the average timespan is about half a year, and a minimum of 4 months.

Once the probate process begins, the decedent’s chosen executor must file a petition with the court requesting to be formally appointed as executor of the will. Most of the time, a probate court will grant any appointment the decedent made as long as the chosen executor shows to be generally competent, and ready to accept the challenge of executing a will. An executor is then granted some level of authority over the decedent’s assets and financial matters in order to best do their job.

Safeguarding Property

After becoming an executor, the first thing to do is scout out the situation and all its many facets. Executors are not just in charge of seeing to it that a will is properly executed – they are in charge of managing the property of an estate. That means going by every single property, ensuring its value, keeping it safe and managing it impartially as the decedent would have. This includes monetary instruments and investment assets, such as bonds, stocks and more, as well as private property, vehicles, and art.

While an executor is effectively in control of the estate and its total financial value, they cannot make any prudent financial decisions without the permission of the court and the estate’s attorney, and under no circumstances can an executor act in his or her own self-interest while managing the decedent’s estate.

Beyond ensuring that it is all kept safe and in perfect condition, the executor has another job to do right off the bat:

Taking Inventory of Estate Assets

Keeping inventory of everything the estate contains is crucial to properly managing and executing a will. In order to settle all of the decedent’s outstanding business and complete the inheritance process from the estate to its beneficiaries, every last part of the estate must be catalogued, valued, organized, and effectively stored somewhere safe.

An inventory list should be made, itemizing everything in the estate and giving it a concrete value. In addition to this, the executor’s next order of business should be to track the decedent’s financial records and follow up on any and all outstanding debts towards the estate, collecting any money owed to the decedent and adding it to the estate’s total value.

Paying All Debts

Once it is clear what the estate is and what state it is in, the next step for an executor is to take care of any business left unfinished by the decedent – and that means dealing with creditors and debtors, paying any and all outstanding debts to whomever files a claim to the estate.

This includes the government. If an estate reaches a certain value, then it must pay the estate tax, also known as the death tax. This value varies from year to year. While the federal estate tax exists, some states have their own estate tax laws based on rules and limitations set by the IRS. California currently does not have a state estate tax, as of January 1, 2005.

Distributing the Assets of the Estate

Once all debts towards the estate are collected and all debts the estate owes are paid, it is time to distribute what is left to respective beneficiaries. The easiest route is to follow a will’s directions and distribute the assets as per the will. However, there are special circumstances wherein an executor must make tough choices regarding a will and the contents of the estate.

For example, if the decedent passed away with numerous debts and their estate is left insolvent after dealing with said debts and responsibilities, beneficiaries effectively get nothing regardless of what the will says.

If the value of property in the estate is less than the bequests in a will, then beneficiaries may receive more from the estate under the ruling of a court in order to match any value promised within the will, based as closely as possible to the decedent’s interpreted wishes as per the writing in the will.

For every beneficiary, the executor must file a Form 1041, also known as a Schedule K-1, with the IRS. This form reflects what the beneficiary’s share of the estate was, to be reported on their individual tax returns.

Receiving Compensation as an Estate Executor

While the executor should typically be someone with the professionalism of a highly skilled attorney and the loyalty of a best friend, being an executor is a job and a difficult one at that – and it deserves a certain degree of compensation for being well-done.

When the probate process is over, and the will has been completely executed, the executor receives an agreed-upon compensation that is not to exceed 4 percent of an estate with a value of $100,000 or less.

As per California law, for larger estates up to $25 million, the executor may receive up to 4 percent of the first $100,000, 3 percent of the next $100,000, 2 percent of the next $800,000, 1 percent of the next $9 million, and finally, 0.5 percent of the remainder up to a total of $25 million.

For estates with total values beyond $25 million, the executor will receive a reasonable fee set by the court as per California’s Probate Code.

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