The Role of an Executor: Duties & Responsibilities in New Jersey and New York
When creating a will, one of the most important decisions you will make is appointing an executor. This individual plays a crucial role in ensuring that your final wishes are carried out and that your estate is managed properly after your passing. The role of an executor is both an honor and a significant responsibility, requiring strong organizational skills, attention to detail, and a basic understanding of legal and financial processes.
Serving as an executor can be a challenging task, especially when dealing with complex estates or family disputes. This guide will explain the role of an executor, their duties, the challenges they may face, and key considerations specific to New Jersey and New York.
What Is an Executor?
An executor is the person named in a will who is responsible for managing and settling the deceased’s estate. Their primary responsibilities include locating and safeguarding assets, paying debts and taxes, and distributing the remaining assets to beneficiaries according to the terms of the will.
The executor serves as the legal representative of the estate, ensuring that all financial and legal matters are handled correctly. If an executor fails to fulfill their duties properly, they may be held personally liable for any mistakes or financial losses to the estate.
Key Duties of an Executor
Filing the Will with the Court
The first step an executor must take is filing the will with the appropriate court to begin the probate process.
- In New Jersey, probate is handled by the Surrogate’s Court in the county where the deceased resided.
- In New York, probate is also handled by the Surrogate’s Court in the county where the deceased lived.
This step is crucial because probate is the legal process that validates the will and gives the executor the authority to act on behalf of the estate.
Identifying and Safeguarding Assets
An executor must locate all assets owned by the deceased, including bank accounts, real estate, investments, personal property, and even digital assets such as online accounts and cryptocurrency.
Once identified, these assets must be secured. This may include changing locks on a home, ensuring that valuables are stored safely, and maintaining adequate insurance coverage. Executors may also need to track down financial records and determine the value of certain assets through professional appraisals.
Notifying Beneficiaries and Creditors
All beneficiaries named in the will must be informed about their inheritance. Additionally, executors are responsible for notifying creditors of the deceased’s passing.
Both New Jersey and New York require executors to publish a notice to creditors, allowing them to file claims against the estate. This step helps ensure that outstanding debts are addressed before assets are distributed to beneficiaries.
Paying Debts and Taxes
Before distributing assets, the executor must settle all outstanding debts. These may include credit card balances, mortgages, medical bills, and other financial obligations.
Executors must also handle the deceased’s final income tax returns, estate taxes, and any other tax obligations. If estate taxes apply, they must be paid before the remaining assets can be distributed to beneficiaries. Failing to properly address tax liabilities can lead to legal consequences and potential penalties.
Distributing Assets to Beneficiaries
Once all debts and taxes have been settled, the executor can distribute the remaining assets according to the terms outlined in the will.
Some distributions are straightforward, such as transferring money to a beneficiary’s bank account. However, more complex assets, such as real estate or business interests, may require additional steps such as property sales or legal transfers.
Closing the Estate
The final step in the executor’s role is closing the estate. This involves providing a full accounting of the estate’s activities to beneficiaries and filing the necessary documents with the court to officially conclude the probate process. Once approved, the executor is discharged from their duties.
Challenges Executors May Face
Dealing with Family Disputes
Family members may disagree over inheritance, especially if they believe the distribution of assets is unfair. This can lead to legal battles, delays, and emotional stress.
To minimize conflicts, executors should maintain transparency and keep beneficiaries informed throughout the process. Open communication and detailed record-keeping can help prevent misunderstandings.
Managing Complex Assets
Some estates contain assets that are difficult to manage or distribute, such as businesses, antiques, or real estate in multiple states. Executors may need to work with professionals such as appraisers, accountants, or attorneys to handle these assets properly.
Understanding Legal Requirements
Probate involves strict deadlines, paperwork, and legal procedures that can be overwhelming for someone without legal experience. Executors who fail to meet these requirements may face fines or legal challenges.
Working with an estate attorney can help executors navigate the probate process efficiently while avoiding costly mistakes.
Personal Liability
Executors can be held personally responsible for errors such as mismanaging assets, failing to pay debts, or distributing funds improperly. To protect themselves, executors should keep detailed records of all transactions and seek professional advice when needed.
Executor Compensation
Executors are entitled to compensation for their time and effort. The amount varies by state and is generally based on a percentage of the estate’s value.
- In New Jersey, executors typically receive 6% of income generated by the estate and up to 5% of the estate’s total value.
Specifically, the executor’s “commission” in NJ is calculated as follows:
- 5% of the first $200,000
- 3.5% of the amount over $200,000 up to $1,000,000
- 2% of the amount over $1,000,000
- In New York, executor fees follow a sliding scale, starting at 5% for the first $100,000 and decreasing for larger amounts.
If an executor is also a beneficiary, they may choose to waive their fee to avoid potential tax implications.
Executor vs. Administrator: What’s the Difference?
If a person dies without a will (intestate), the court appoints an administrator instead of an executor. The administrator performs similar duties but must distribute assets according to state intestacy laws.
- In New Jersey, surviving spouses or close relatives are given priority for appointment.
- In New York, the closest relative, such as a spouse or adult child, is typically appointed as the administrator.
Since intestate estates follow default state laws rather than personal wishes, having a valid will is essential to ensure assets are distributed as intended.
Can You Decline to Serve as Executor?
Being an executor is a significant responsibility, and not everyone is willing or able to take on the role. If you have been named as an executor but do not wish to serve, you can decline by notifying the court in writing.
The court will then appoint an alternate executor or an administrator, usually someone named as a backup in the will.
How to Choose the Right Executor
When selecting an executor, consider the following:
- Trustworthiness: The executor should be reliable and act in the best interests of the estate.
- Financial and Legal Knowledge: While legal expertise isn’t required, a basic understanding of financial matters is helpful.
- Availability: Managing an estate can take months or even years, so the executor must be able to dedicate the necessary time.
- Willingness to Serve: Always ask the person before naming them in your will to ensure they are comfortable taking on the role.
Tips for Executors to Succeed
Get Professional Help
Consult with an estate attorney, tax advisor, or financial planner to ensure legal and financial matters are handled properly.
Stay Organized
Keep detailed records of all estate transactions, correspondence, and court filings to avoid disputes or legal issues.
Communicate Clearly
Regularly update beneficiaries on the status of the estate to prevent misunderstandings and conflicts.
Follow Deadlines
Meet all probate filing and tax deadlines to avoid penalties or delays in settling the estate.
Final Thoughts
Serving as an executor is a challenging but essential role. Executors must navigate legal requirements, financial responsibilities, and potential family conflicts while ensuring that the deceased’s wishes are honored.
If you have been named as an executor or need help appointing one, our experienced estate planning attorneys in New York and New Jersey are here to assist. Contact us today for expert guidance and personalized support.
Mitchell C. Beinhaker, Esq. is a business lawyer and estates attorney who runs a solo legal & consulting practice representing business owners, entrepreneurs, executives, and professionals. Through his 30+ years of experience, Mitchell has handled business development, marketing, firm management, along with business transactional work for clients of the firm. He has extensive experience with corporate governance, commercial transactions, real estate, and risk analysis. Using his years of practical experience, he drafts contracts, negotiates purchases, and can manage outside counsel for any corporate situation. For business owners and executives, he creates and implements estate plans, along with succession plans to help companies continue for future generations.
Mitchell is the co-author of 10 Ways to Get Sued by Anyone & Everyone: the small business owners guide to staying out of court, available in paperback and kindle from Amazon.
If you need legal help with any of our services, contact our office for a free consultation. You can email us at info@beinhakerlaw.com. To learn more about Mitchell and his practice, visit beinhakerlaw.com.
Beinhaker Law and Mitchell C. Beinhaker, Esq. do not guarantee the accuracy of any information provided in this article. Its not to be construed as advice of any kind. Be sure to check with your local professionals before making any decisions.
