Even though someone creating a last will may set aside assets to compensate the executor, it is a largely underpaid and unappreciated position. Handling an estate comes with a lot of work and stress that will likely dwarf whatever payment someone offers for that labor.
Additionally, the executor of an estate takes on personal risk when they handle someone else’s financial matters. If they make mistakes while resolving the affairs of the deceased party, they may be financially or legally responsible for those oversights. Taxes are often a major concern when administering an estate. Are you responsible for taxes that go unpaid if you are the executor?
Your responsibility is only as big as assets you distribute inappropriately
As an executor, you have an obligation to repay financial responsibilities on behalf of the deceased individual before you give any property out to their loved ones.
You will need to pay outstanding taxes with the assets in the estate and also make payments to any creditors, like financial institutions or hospitals with unpaid bills in the name of the deceased. Typically, executors need to wait to make distributions until they have filed the necessary taxes for the estate and the deceased person, and contacted all creditors to make final payments on their accounts.
When you agree to the position of executor, you don’t assume responsibility for debts or taxes that the deceased could not repay. However, you may be responsible for the value of any assets you distribute to family members and heirs without first paying all necessary taxes and debts.
Understanding your responsibilities as an executor can help you avoid making mistakes during estate administration that might have financial consequences.