Choosing an executor for an estate is a decision requiring a bit of thought. Some people select an attorney, but many choose a family member or close friend to ensure that their final wishes are addressed in a legal and proper manner. If you are preparing a will and are considering your choice of executor, this overview of the responsibilities of an executor can help you determine the most suitable person.
If you have been named an executor of an estate, this is an indication the deceased person considered you knowledgeable, capable and trustworthy. This honor means you must make certain that every request made in the will is carried out. You must also protect the estate’s assets and distribute funds in payment of debts owed by the estate. If not, you could be held legally responsible. It’s fairly simple to serve as an executor for some estates, while others can be complex and challenging.
The laws of the state in which the deceased resided must be followed. If you are serving as an executor in North Carolina, our North Carolina estate planning law firm can help.
Who can serve as executor of an estate in North Carolina?
Executors must be of legal age and of sound mind
In North Carolina, an executor must be at least eighteen years old and of sound mind. Being of sound mind means not officially judged as incapacitated by a court.
No person who has been convicted of a felony under any state or federal law can serve as an executor in North Carolina, unless that person’s “citizenship has been restored”. If the person has completed any criminal sentence and/or parole terms/post-release supervision he or she is considered eligible to serve as an executor. An unconditional pardon would also qualify the person to serve.
Additionally, North Carolina restrictions include a potential executor who is illiterate or “otherwise unsuitable” as determined by the clerk of superior court will not be allowed to serve as executor. In most cases, designated executors are confirmed without question.
If, however, a question should arise concerning the qualifications of a person named as executor, the court will hold a hearing and a judge will make a decision. Former spouses who are now divorced or separated may not serve as executors, and selected executors do have the right to decline the position.
If you, a friend or family member may be serving as executor of an estate, it’s important to familiarize yourself with the basic responsibilities, and the general timeframes during which each must be completed.
First Steps an Executor Must Take Immediately Following a Death
Obtain Copies of the Death Certificate
Ten to twenty original prints of death certificates may be needed for the legal tasks you will face. The funeral home should provide them at minimal cost.
A death certificate is required by the probate court, in the county of the deceased’s residence at the time you file the will. A death certificate will also be required:
- To change bank account ownership.
- For tasks involving investments.
- For additional legal transactions that accompany the settling of estates.
Secure the Property of the Deceased
The deceased’s real and personal property should be secured as soon as possible – definitely before the date of the funeral. Someone should remain at the deceased’s residence while the funeral takes place, to discourage criminals who scan obituaries and target homes of the deceased or close family members, during funerals.
You are now in charge of all the deceased’s possessions, from real estate to household goods. If survivors live in the deceased’s home, make sure the conditions are met to allow the household to continue to operate.
If the home is uninhabited, maintain payments for heat, electric, lawn maintenance, but cancel telephone, internet, TV service and other unnecessary utilities, as well as subscriptions to publications.
Remove valuables from the home if necessary, to keep them safe. Property must be secured even from friends and family until specifications of the will have been fulfilled. Arrange to collect mail or have it forwarded. Check on the condition of the home often.
Obtain a Copy of the Deceased’s Will
If you don’t already have a copy, you will need to obtain one as soon as possible. Confirm that the deceased’s closest family members know you have been appointed executor. Arrange to remain in contact with potential beneficiaries and those specifically named in the will. In some cases, persons not named in the will who would have been entitled to receive property, had there been no will, may benefit from the assets of the estate.
Steps Required During the Initial Three Months
Initiate the Probate Process
An executor must file the will with the probate court in the county of the deceased’s residence within ninety days of the death.
If you were named in the will to administer the estate, you are generally referred to as the executor. To officially serve as executor, you must submit an application to the Clerk of Superior Court in the county where the deceased person was a resident at the time of death.
If there was no will, but you were asked to serve as the administrator of the estate, you must request that the court appoint you to serve as the estate’s personal representative.
In North Carolina, assets of a “small estate”, can be distributed without going through probate court by filing A North Carolina Small Estate Affidavit. A” small” estate is an estate in which the value of everything except real estate is less than $20,000. (or less than $30,000, if the surviving spouse inherits everything).
Moderately sized estates with simple terms often experience a streamlined probate process. Large or complex estates will remain in probate longer.
Contact Insurance Companies and Employers to Discuss Coverage or Benefits
Insurance companies and other similar entities must be notified by the estate’s executor. Contact the appropriate companies, and/or the deceased’s employer. Confirm that the payments from life insurance policies, special accounts or other distributions scheduled for payout upon the deceased’s death take place.
Open a Bank Account in the Name of the Estate
Utilities, home mortgage payments and other necessary bills must be paid for the extent the estate remains active. Notify creditors of the death to verify what is currently owed and avoid further interest charges.
Contact Social Security or Pension Providers
Contact the Social Security Administration, or other distributor of retirement benefits, to stop payments, unless the funeral home has already done so. Any social security payments received following the deceased’s death must be returned. But in some cases, Social Security benefits or a one time payment may be available for family members. It pays to check, if in doubt.
Compile an Inventory of Assets – and Pay Debts
Inventory of an estate must be filed with the county probate court within ninety days of the executor’s appointment. The values assigned must be the values of the assets on the date of the decedent’s death, not the date the inventory was completed.
The executor must pay all debts owed by the estate, from the estate’s funds. The executor may sell property to pay debts.
The total of the estate’s remaining debts, subtracted from total assets, determines the amount of “receipts and disbursements” – basically, the net profit (or loss). This is the amount distributed among heirs as directed by the will, provided assets remain.
If the estate is extensive, compiling inventory and paying debts may take significant time. If the finalized statement of receipts and disbursements shows a positive balance, an executor serving in North Carolina has the right to compensation up to five percent of the total of “receipts and disbursements” from the estate. Expenses must be documented.
Issues That Must be Addressed From Six Months to a Year After the Death
File and Pay Taxes
Federal and state income taxes for the estate must be filed for the year the person died. Income taxes could be due earlier than six months but extension is possible. No inheritance tax is owed on estates of North Carolina residents. Federal inheritance tax is only owed by estates worth over $11.4 million in 2021.
Make Final Disbursements
Once all debts and taxes are paid, the final disposition of assets to heirs can proceed. Following the requests of the will and settling issues between heirs regarding some assets not mentioned in the will may require the sale of additional assets.
Close the Estate
After all debts are paid and assets distributed, the executor closes the estate’s bank account. A final accounting is submitted to the court, and the executor requests that the court close the estate. If the estate cannot be closed by one year after the death, the executor must file an annual account, which should include bank statements and details of dispersal of assets up to that point.
Estates differ greatly in scope; some require more extensive legal procedures than others. You should consult an estate attorney for guidance on your specific situation.
Our Estate Planning Team Can Help
At McCollum Law, we take pride in helping individuals and families just like yours navigate the estate planning process. To find out more, call us today or fill out our contact form to schedule a consultation with one of our estate planning professionals.