This is an important question that can be difficult to answer in a single article. There are a long list of duties that Executor’s have under California law, but they can be summed up using the categories below:
Take Control of Estate Assets and Properly Manage Them
The first job over any executor is to take control of all the estate assets. This is referred to as marshaling the assets. You need to be sure that the estate assets are secured against theft and retitled so that you, as executor, can control the assets. You also have a duty to ensure that any cash assets are held in interest-bearing accounts so the estate can receive interest on that cash while the probate is pending.
If the estate has real property, then you have a duty to secure that real property, insure it against any potential loss, and remove anyone living in the property who is not supposed to be there (unless the property is a rental and the tenant is paying rent). If the property is a rental, then you need to ensure the tenant is paying you the rent so you can deposit the funds into the estate savings account.
If the estate has any risky assets, such as highly risky stocks or other financial investments, then you need to liquidate those assets so that no further loss will be incurred by the estate.
In other words, you need to act prudently with estate assets. Secure the assets, and then protect them for later distribution to the estate beneficiaries.
Inventory and Appraisal of Assets
Every executor is required to file an inventory and appraisal of all estate assets. You can value cash or cash account yourself, but all other assets must be appraised by a court-appointed referee. The court will give you notice of which appraiser you must use to value the estate assets. The inventory and appraisal of assets must be submitted to the court, and served on all interested parties, within four months of letters being issue to the executor.
The inventory and appraisal is an important document because it tells everyone what assets are subject to the estate administration. The appraisal will also be used as the begging values of all estate assets when you prepare your accounting.
Notify Creditors
One of the most important functions of any probate is the protection of creditors. For that reason, an executor has a duty to identify and notify every potential creditor of the decedent. Also, by sending out creditor’s notice, the creditor’s only have sixty days in which to file a claim with the state. If a creditor fails to file a claim by the deadline, then that creditor is forever barred from collecting on their debt.
It is important to notify creditor’s as soon as possible. This allows all claims to be brought timely and then the executor can either pay the claims, or contest them if they are not legally enforceable debts. The estate cannot be distributed until the creditor’s claims are resolved, so resolving claims is an important function.
Ready Estate for Distribution (such as Selling Real Property)
The executor has the right to sell any assets if required to pay the costs of estate administration, or if the beneficiaries request it. For example, multiple beneficiaries may not want to own real property together, so instead they can request the executor to sell the real property and distribute cash in lieu of the real property.
Of course, selling assets take time, so the executor needs to determine quickly if a sale of any asset is required. And there are different procedures for selling property from an estate depending on whether the executor was given independent powers under the Independent Administration of Estates Act. That all needs to be figured out well in advance of any sale.
Record Keeping and Accounting
As executor, you must provide a detailed accounting to the court before the estate can be closed and you can be paid. That means you must keep every document and receipt you receive as executor. You will need to present all of your records and receipts to an accountant or your attorney to prepare a probate accounting. Be sure you are not caught unprepared because anything you cannot prove to be a valid estate expense will be charged against you personally.
Close Estate and Distribute Assets
When all your work is done, you must file a final report and petition with the court seeking to make finale distributions, pay yourself and your attorneys, and approving your accounting. No assets can be distributed, and no fees can be paid to you or your attorneys, without a court order. Therefore, the final petition to close the estate is important and should be done a soon as all the other estate issues described above are resolved.
This is a basic overview of an executor’s duties and liabilities, but you can find more information in the California Probate Code. Also, every personal representative of a California probate estate is required to sign and file with the court a form entitled Duties and Liabilities of Personal Representative (form DE-147; see link here.) This form provides a basic overview of the requirements you have as a personal representative of a probate estate. It is not an exhaustive list, but it gives you a good start on the duties you must know to act properly as a fiduciary.
