Under law of most states, a person has broad rights to direct the disposition of his or her assets. Part of this direction usually involves nomination of an executor to administer the probate estate. State law generally charges the executor with acquiring any part of the decedent’s estate that is not in his possession and managing the estate in the best interest of all concerned, consistent with the will and state’s laws. Executors must carry out their duties in good faith and as a reasonably prudent person would in the circumstances.

The law of each state sets forth a host of specific applications of the duties of an executor. The basic duties of an executor could be summarized in general as follows:

• Review the Will and Arrange for Probate. The executor must locate and review the will carefully, noting any special instructions. The executor must also select the attorney and accountant that will represent the probate estate.
• Gather, Inventory and Value Probate Assets. Once the estate is opened and letters testamentary** have been issued, the executor should search for and identify the assets and debts of the decedent. Unless it is waived, the executor should immediately begin a formal inventory of the estate assets. Even if inventory is waived, the executor and the probate attorney will an informal inventory of the probate assets. The estate assets will also need to be appraised unless appraisal is waived or is unnecessary. If inventory and appraisal are not waived, the executor will usually have a certain period of time from the grant of letters testamentary to file the inventory and appraisal with the probate court.
• Open an Estate Account and Manage Estate Assets. The executor must open an estate account. In order to do so, the executor will need to obtain a federal tax identification number for the estate. The estate attorney or accountant will usually assist the executor in filing the Application for Employer Identification Number with the IRS (the form can be filled out online fairly quickly).
• Notify Creditors and Pay Debts of the Estate. If the executor finds debts against the probate estate, a letter should be sent to the known creditors as soon as possible. The letter must contain sufficient identifying information to allow the creditors to file a claim against the probate estate in the probate court. Once all known creditors have been notified (or, if there are no known creditors), an affidavit must be filed with the probate court in some states attesting to the fact that all creditors, if any, have been notified pursuant to state law. Once this affidavit is filed with the probate, a general notice to creditors may have to be published in the local newspaper and proof of publication filed with the court. The notice must tell the creditors that they have a right to probate a claim and that all claims that are not probated within a certain statutory period will be barred.
• File Tax Returns and Pay All Outstanding Taxes. Because the executor could be held personally liable for unpaid taxes, the executor should be certain that all tax returns have been filed and all taxes have been paid. The decedent’s final income tax return should be filed on Form 1040 reporting all income earned prior to the decedent’s death. Income tax returns for the estate (Form 1041) should also be filed to report income earned during each year of estate administration. If the decedent is subject to the estate tax, an estate tax return (Form 706) must also be filed. The estate tax return and the taxes are due nine months from date of death, or with extensions, 15 months. If the decedent made taxable gifts but failed to file a gift tax return (Form 709), the gift tax return should be filed with the estate tax return.
• Distribute Assets to the Beneficiaries and Close the Estate. Once the preceding steps have been taken, the executor should work with the attorney to file a final accounting and close the estate. At the time the estate is closed, the executor will distribute any remaining assets to the beneficiaries of the estate pursuant to the terms of the will. Once the estate can be closed, the executor is generally released from further duties on behalf of the estate.

**Letters testamentary are governed by state probate laws, which vary by state. When a court appoints an executor of administrator of a deceased’s estate, the administrator or executor will receive a document called Letters Testamentary or Articles of Administration which will be issued by the court, outlining the administrator’s or executor’s authority and responsibility. Before money or assets are transferred to the executor or administrator, certified copies of the letters are often required by banks and other financial institutions, the federal government, stock transfer agents or other courts.