Being named executor or administrator for a loved one’s estate plan can be a wonderful honor. It shows they trust you to carry out their wishes, even during an undoubtedly emotional time. That said, it also means you are stepping into a role that blends honor with responsibility—one where careful decisions regarding finances and beneficiaries, balancing paperwork, and adhering to a seemingly endless list of legal obligations fall squarely on your shoulders.

Anyone who has been an executor will tell you it is a lot to handle. Even well-intentioned missteps—signing a document incorrectly or depositing funds into the wrong account—can expose you to risk or delay the administration process. That is why we are writing this blog post.

While not a complete list, the sections below provide practical, real-world guidance for executors and administrators managing estate property, conducting business on the estate’s behalf, and paying expenses and creditor claims.

We want to help you carry out your duties carefully, efficiently, and in compliance with applicable legal standards.

Where Trust Meets Responsibility: Your Role Explained

1. Title All Assets in the Estate Name

As a general rule, all assets should always be properly titled in the Estate. Typically, the ownership should reflect the following or similar wording: “Your Name, executor/administrator of the Estate of Decedent.” Notable exceptions to watch out for are retirement accounts, IRAs, and annuities, as transferring title to these assets into the estate may result in adverse income tax consequences. You should also check with your attorney, financial advisor, and/or CPA. They are familiar with the intricacies of these accounts and can advise you before you attempt to re-title them.

2. Know How to Sign Documents as Executor/Administrator Properly

When signing anything on behalf of the estate, always sign as “(Your Name), executor/administrator.” By signing as executor/administrator, you will not be personally liable for that action as long as that action is within the scope of your authority under the estate and applicable laws.

3. Deposit Money into Estate Accounts

All money received should also be deposited into an account in the name of the estate. This includes income from investments and proceeds from the liquidation or sale of assets. An interest-bearing checking account should be opened for the estate. Never place any assets or money received into accounts in your own name—even if you intend to transfer them later to an estate account. 

4. Know How to Deal with Assets Outside of the Estate

Sometimes, some of the assets of the decedent are not in the estate. This may, depending upon the circumstances, require you to take action to transfer title to those assets into the estate. Certain assets outside of the estate may be held in joint tenancy or have a beneficiary designation, in which case they may pass outside the estate “by operation of law” directly to the other joint tenant(s) or beneficiary(ies).

Even though these assets may pass in this manner, it may be possible that the estate has a claim for a portion or all of the assets; you may need to investigate the source of the funds that created or maintained that asset and with the help of an attorney, determine whether there is a claim that you, as executor/administrator, may need to make on behalf of the estate. However, depending on the law of the state where the asset is located, a full court probate of the Will may be necessary to transfer the assets into the estate. This may be particularly true of real estate.

5. Be Mindful of Third-Party Confirmation of Authority

Sometimes, third parties with whom you are transacting business may request confirmation of your power to enter a certain type of transaction. Oftentimes, you can get a letter from an attorney reciting your power under the Will and confirming your authority to act. Sometimes, you may require a court’s approval (or you may want a court’s approval to protect yourself from liability). Situations where this issue may arise include where you are borrowing and utilizing probate assets as security, or where you are entering unusual types of investing, such as “buying on margin” or “puts and calls” (but watch out … “unusual investments” may be too risky and unsuitable for the estate).

If you are managing an operating business that is in the form of a separate legal entity, such as a corporation, limited liability company, or family limited partnership, you also need to comply with the legal procedures specific to the entity and should definitely seek the assistance of an attorney when transacting this kind of business. If you intend to sell or liquidate major probate assets, the beneficiaries may need to be notified, and, again, you should seek the advice of an attorney before doing so and may want to seek court approval.

6. A Note on Paying Expenses

Your approach to paying estate expenses should be similar to your personal expenses: they should meet the general standards of being “reasonable” and “necessary.” The Will may provide additional guidelines as to the types of expenses that can be paid or the procedure for their payment. Reasonable and necessary expenses include funeral and burial costs, medical expenses, credit card bills, utilities, property taxes, and income taxes. Reasonable and necessary professional fees, such as for an attorney, accountant, financial advisor, property manager, and appraiser, can be paid from the Will as long as they relate to Probate Assets and activities.

You may also be entitled to pay yourself an executor/administrator fee, depending upon the terms of the Will; you should see an attorney about the appropriate amount and timing of its payment. The carrying costs of real estate, including normal maintenance and repairs, can be paid by the estate while the property is held in the estate. This may even include expenses necessary to prepare the property for sale if the estate is to sell it before distributions are made to the beneficiaries. However, you cannot pay for the repair or improvement of real property immediately before its distribution to the beneficiaries; such expenses should be paid directly by the beneficiaries. If you personally pay any reasonable and necessary expenses related to the estate, or to the decedent’s death (such as funeral expenses), you may reimburse yourself, but be sure to maintain detailed receipts in case these expenses are ever questioned.

7. A Note on Creditors

One of the initial determinations that the executor or administrator should make is whether or not the estate appears to be solvent. In most cases, the debts owed by the decedent will be small in relation to the overall value of the estate, and it will be clear that there are sufficient liquid assets to be able to pay all creditors. In cases in which it appears that there may be more debts than assets in the estate, or in cases in which there is an issue as to whether the estate will be solvent or not, the executor or administrator should work closely with the attorney regarding the administration of the estate and the payment of debts.

8. A Note on the Ability to Pay Claims when the Estate is Solvent

In general, an executor or administrator will classify and pay claims in the same order of priority, classification, and proration described in the Texas Estates Code Section 403.051. An executor is, however, free from personal liability for paying a claim at any time (to the extent it is approved and classified by the personal representative), if the claim is not barred by limitations and at the time of payment, the executor reasonably believes the estate will have sufficient assets to pay all claims against the estate.

9. More on Creditors and Creditor Claims

Third parties may file creditor claims for bills unpaid by the decedent. These may or may not be paid by you, depending upon the terms of the Will; in most cases, they can be paid as long as they are legitimate. It is your duty to determine whether a creditor claim is legitimate and to dispute claims that do not appear to be so. If you are concerned that there may be creditor claims outstanding that you do not know of, and you may want to cut off the period for creditors to file claims, you may want to publish a notice to creditors. You should see an attorney to help with the decision, wording, and placement of the publication. If you have any doubt about whether or not to pay an expense from the Estate, you should get the advice of an attorney first.

Call Leigh Hilton PLLC Today!!

Having a competent attorney in your corner will help you and your family navigate the often overwhelming waters of protecting everything you own and everyone you love. That is our job, and we think we do it better than anyone else. Call Leigh Hilton PLLC so we can help ensure you and your family are taken care of in the best possible way.

Leigh Hilton PLLC wants to be your first call every time for any estate planning need. We look forward to serving you.