Executors: what does an executor do?

My parents just told me I've been named executor of their will. What does that mean? What does an executor do?

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An executor, called a personal representative in Wisconsin, manages the estate of someone who has died.

"The personal representative is named in a will or, if no will exists, is appointed by the probate court," said attorney Maureen Kinney. "Sometimes it is the oldest child or the child who lives closest to the parent. It could be a family member, friend, business associate, financial institution or trust company, but it needs to be a trusted person who will deal with details and finances."

To begin probate, the will is admitted into court, something that needs to be done soon as solely-owned assets can't be accessed after a death until a personal representative is appointed.

The personal representative inventories real estate, other assets and personal property, pays debts and taxes owed from the estate and then makes sure the remaining assets go to those entitled to them. Documents are submitted to the court, usually with the help of an attorney.

Retirement plans, IRAs, and insurance policies bypass probate if there are named beneficiaries. Estates of persons dying in 2014 would have to be greater than $5.34 million for estate taxes to apply. There is no tax on transfers between spouses.

"A personal representative manages the assets in the best interests of the heirs and creditors," Kinney added. "For this work, the representative is entitled to receive as compensation 2 percent of the value of the estate."

Assuming no one disputes the will, probate usually takes about a year. There is a notice in the newspaper for creditors to file claims, and the assets usually need to be sold to distribute them to heirs. In Wisconsin, the Department of Revenue must also give its approval before the estate is closed.

She recommends in estate planning that her clients create a personal property list indicating who should receive certain items, such as antiques, jewelry or mementos. It can be handwritten but must be signed and dated and referred to in the will to be enforceable.

"Some of the hardest decisions can involve items of sentimental value," Kinney said, adding, "Before Wisconsin law allowed this kind of document, people put stickers with children's names on them to indicate who would get the property, but the stickers were not legally binding."