Should you agree to be an executor?

At some point, you may be asked to serve as the executor of someone’s estate. If so, congratulations—someone clearly trusts you. But before you say yes, it’s important to understand what the role entails. Serving as an executor comes with significant responsibilities, time commitments, and potential legal risks.
The duties of an executor can vary by state, but common responsibilities include:

1. Filing the will and securing legal authority
Your first task is to locate and file the will with the probate court. Once approved, you’ll receive documents that authorize you to act on behalf of the estate—essential for dealing with banks, insurance companies, and other institutions.

2. Opening an estate bank account

You’ll need to pay the deceased’s expenses from a dedicated estate bank account. To do this, you’ll transfer funds from the deceased’s accounts into the new account.

3. Identifying assets and debts
Executors must find all the deceased’s assets—sometimes a major undertaking. This could mean sifting through old papers, storage units, and safe deposit boxes. You must also locate physical items like jewelry or artwork, even if they’re with family or friends. Some assets will go through probate, while others will not.

4. Handling taxes
You’re responsible for valuing the assets for tax purposes and filing necessary returns, including estate and income taxes. This could involve both federal and state forms.

5. Distributing inheritances
After debts and taxes are settled, and beneficiaries have signed a release form, you’ll distribute the remaining assets according to the will. You may also need to fund any trusts outlined in the estate plan.
These tasks can take months—or even years—depending on the complexity of the estate.

Risks you should know
Even for financially savvy individuals, acting as an executor can be challenging. The position carries both fiduciary and legal obligations, and mistakes can have serious consequences.

1. Personal liability
You must pay off all debts and taxes before distributing inheritances. If you reverse the order, you could be held personally liable. It’s also essential to distribute assets fairly and at the same time. Missteps can lead to lawsuits or increased estate tax burdens.

You’re also responsible for protecting the estate’s value. For instance, you need to manage stock portfolios, homes, or artwork carefully to avoid losses. Failure to do so could be considered a breach of fiduciary duty, opening you up to personal liability.

2. Major time commitments

Depending on how organized the deceased was—and your proximity to them—you could spend countless hours gathering documents, closing accounts, and meeting tax deadlines. Executors are often surprised by how demanding this role can be.

3. Dealing with difficult heirs
You must secure estate assets, which may delay beneficiaries from accessing them. This can lead to tension or even legal disputes. For example, if one heir takes property promised to another, you could be held accountable. Keeping detailed records and communicating clearly with all parties can help avoid conflicts.

The bottom line
Serving as an executor is an honor—but not one to accept lightly. Understand the responsibilities and evaluate whether you have the time, knowledge, and temperament to do the job effectively before agreeing to take it on.

Thomas M. Dowling, CFA, CFP®, CIMA® is the Head of Wealth Management at Alliance Global Partners of the Lowcountry on Hilton Head. He can be reached at infohh@allianceg.com or (843) 420-1993.