If you someday serve as an estate executor, you will be responsible for managing assets the decedent left behind and distributing them to beneficiaries. This might feel overwhelming, particularly if you do not know how to start these important tasks.
Fortunately, opening an estate bank account can help you carry out these duties efficiently and transparently.
How an estate account works
An estate bank account is a temporary account opened in the name of the estate. As executor, you have the authority to conduct financial transactions on behalf of the estate through this account. An estate account serves as a central location for the funds of the estate, including proceeds from the sale of assets, funds from the existing accounts of the decedent and any money owed to the deceased.
The fulfillment of estate duties
The estate account enables the executor to pay the necessary expenses and debts of the estate. This includes settling unpaid bills, taxes and other obligations. The executor can also use the account to pay for costs related to the probate process, such as court filing fees.
With an estate account, you can produce a record of the financial transactions of the estate. By maintaining accurate records of all payments from the account, you can help ensure that all beneficiaries receive their intended share of the estate.
Protection of the executor
Separating the estate finances from your personal finances is another benefit of an estate bank account. Since the account provides a clear record of how you used the estate funds, it reduces the risk of any potential disputes or accusations of mishandling funds by beneficiaries or loved ones.
Being an executor can be stressful enough. Fortunately, simple actions such as opening an estate account may prevent you from unnecessary problems as you complete the duties of your position.