YOU’RE THE EXECUTOR,
NOW WHAT DO YOU DO ?
By: James M. Bright
Attorney at Law
The following is provided for informational purposes only and is not, nor should it be construed as legal advice.
So, you agreed to act as the executor (executrix) of a loved one’s Will. You took the Will to an attorney to assist you in getting it admitted to probate. The judge proclaimed that the Will was admitted to probate and that you would be allowed to serve as executor. Now, what do you do?
1. Oath - Within the first twenty (20) days after being appointed executor or executrix, you must file an Oath of Office with the probate clerk for the county in Texas where the probate was filed. In most cases, if the same person who offered the Will for probate is the person named in the Will to be executor and is the person who appeared in court, the oath will be taken before the clerk on the same day as the hearing. If a bond is required, it will also need to be posted before the letters testamentary are released to you. Your attorney will likely call both of these matters to your attention and make certain that they are done in a timely fashion.
2. Take possession of all property belonging to the decedent. Gather all property that was owned by the decedent on the date of death and assert control over it. Any cash that you receive should be kept in a bank or other financial institution in the name of the decedent’s estate; example: “Estate of John Doe.” This account will normally also require that you obtain an “EIN” number from the Internal Revenue Service. (This is a very simple task that can normally be accomplished via telephone or on-line.) Not all possessions need be physical possession; it can be constructive possession, but you need to be sure that you are exercising sufficient control to protect the asset in question. Example: If grandma is living on one of the properties and will continue to do so, don’t get carried away and have her evicted so that you can later reinstate her. On the other hand, if Joe Renter is living on the property and refuses to vacate even though grandma is waiting to move in and Joe has no other rights to the property, you may be required to have Joe evicted so the directives in the Will can be carried out.
3. Notice to General Creditors – Within one (1) month after receiving letters testamentary, a notice to general creditors must be published in accordance with Texas Probate Code §294. Although this writer cannot be certain what happens in all law firms, in this law firm, notice to general creditors will be done for you and the cost for doing so will have simply been made part of filing fees and other expenses. In some cases, the personal representative must also send notice to the comptroller of public accounts within one month following appointment. (Ask your attorney about this point to determine if it applies to the estate that you represent.)
4. Notice to specific creditors – Requirements depend upon whether a debt is a secured or unsecured debt. If secured by a lien mortgage, deed of trust, etc., notice must be given to secured creditors via registered or certified mail within four (4) months following your appointment as representative of the estate. (Note: This is a task that may not necessarily be performed by your attorney, so you will need to inquire to be certain that you have fulfilled your duties.) If a debt is “unsecured,” notice is permissive and may be made at any time during the administration of the estate. If there are a large number of unsecured creditors or if the sums owed are large in relation to the overall worth of the estate, you may wish to discuss them with your attorney. He/she may be able to point out steps that can be taken to shorten the statute of limitations for unsecured creditors and make it safer for you to make final distribution of assets without fear of later-filed lawsuits against the estate.
5. Notice to beneficiaries – Pursuant to Texas Probate Code §128A, within sixty (60) days following your appointment, you must give notice via certified mail to all beneficiaries of the filing of the Will for probate, and you must provide them with a copy of the Will. Within ninety (90) days, an affidavit of compliance must be filed with the Court to show that this has been done. This notice of compliance would normally be prepared for your signature and then filed by your attorney based upon information that you have given him. (If you are in doubt, be sure to ask your attorney about this duty.)
6. Inventory – Within ninety (90) days following appointment, the executor must file a fully verified and sworn inventory with the clerk of the court which must include a detailed listing of all real property, all personal property and all claims that the estate may have against other persons or entities.
7. Governmental beneficiaries – Executors need to be aware of a short time limit in which to notify charitable organizations, the state of Texas or any governmental unit if they have been named as beneficiaries under the Will. This notice must be sent via registered or certified mail, together with a copy of the Will, not later than thirty (30) days following admission of the Will to probate.
- Individual Returns – If the decedent’s income during the year of his/her death was great enough to require filing of a federal income tax return, that return should be filed to either pay taxes due or to collect refunds.
- Federal Estate Tax Return - If the decedent’s estate exceeded the federal tax exemption at the time of death ($3,500,000.00 in 2009; unlimited in 2010, and a yet-to-be-determined amount in following years), then both a federal and state tax return will need to be filed. Before determining this amount, be sure to speak with a tax professional to determine if a six-month alternate evaluation might be beneficial.
- If, after the death of the decedent, the estate itself continues to produce income, then a fiduciary income tax return of the estate may become due.
9. Other IRS notices – If the estate will be subject of a fiduciary income tax return as discussed above, you will be under a duty to file a “Notice Concerning Fiduciary Relationship” (IRS form 56) as quickly as possible along with the application for EIN number previously discussed.
10. Transfers of Property – Finally, after all debts have been settled or paid, you are ready to distribute the remaining property to the beneficiaries as described in the Will. You will need to look to the Will for instruction in this regard. If the Will specifies that property may be distributed in “money” only, then you will need to liquidate the assets and distribute the funds in the percentages dictated. If the Will allows you to distribute the property “in money or in kind,” then (within the authority given) you will pass title to property of the estate. The letters testamentary issued to you by the court will give you the authority to act with the decedent’s property just as he/she could have for the purposes of following the instruction in the Will. Title does not pass automatically just because you are the executor; you must still prepare and execute documents of transfer. Although transfer documents are not usually prepared as a matter of course by most probate attorneys as a necessary part of the probate, they are usually available through the probate attorney for a nominal cost.
As always, this article and its monthly companion articles are not intended to replace the services of an attorney. Most of the duties described on the above list can be accomplished with very little effort and within a relatively short time period. An experienced attorney of your choosing should be able to anticipate most of these issues and give you a very good idea of what will be involved by you personally.
James Bright is admitted to practice before the Federal Courts for the Southern District of Texas and Eastern District of Texas as well as all of the Justice Courts, Probate Courts, County Courts at Law, District Courts, Courts of Appeal and Supreme Court for the State of Texas. He maintains an office in Houston and by appointment another at 208 McCown Streetin the heart of historic Montgomery. Contact may be made by telephone (936) 449-4455 or (281) 586-8277. For more information about wills or probate in Texas, please see- www.houstontxprobate.com