Settlement of an Estate – So You Want To Be An Executor?
To paraphrase William Shakespeare in Twelfth Night..
…Some seek responsibility – Others have responsibility thrust upon them
There is a great responsibility and many duties involved in the settlement of an Estate.
Below is a list of the basic information that you will need to acquire in order to manage your responsibilities and a sequence of likely events that take place.
This is by no means an exhaustive list, nor is it a chronological listing. Often it will seem that everything is happening at the same time. Each situation is different and this article can be only the starting point and a brief guide to the comprehensive duties of an executor and settlement of an Estate. Indeed, Probate Law is an entire subsection of law and Estate Planning. As a very general rule, the larger the Estate, the more complex the responsibilities.
A. Notification of Death – to family, obituaries, newspaper notifications
B. Carrying out the Last Wishes of the Deceased – for example burial (is there a pre-paid burial arrangement in existence for the deceased?); gravesite; headstone; cremation; notifications; religious services; memorials; bequests and placement and care of any pets. The placement of pets has become a unique separate issue in courts of law, including bequests for the care and maintenance of beloved pets. Are there Special issues of horses and exotic animals at ‘pets’? Arrangements for their immediate care to be made?
C. Legal Documents– Location and access to documents-
a. Certificates of death – obtain an adequate number of ‘official’ copies of this document, since you will probably need them if agencies refuse a simple photocopy or notarized copy.
b. Birth and Marriage Certificates
c. Hopefully a will is in existence – signed and duly executed according to the laws of the state
d. Papers relating to any Trust(s) if any have been created and filed. Particular attention should be given to charitable remainder trust documents and unfunded Trusts.
e. Legal documents such as divorce, parental/support agreements and property settlements, pre/post marital agreements
f. Military discharge papers if applicable, including military pensions
g. Access to bank safe deposit box(es) and/or home safe
D. Financial Documents
a. Social Security information including: social security number; the deposit amount and where deposits were being made
b. Tax related documents including previous filings
c. Pension documents and stock options; IRA’s; annuities
d. Securities – stocks, bonds, etc. Foreign investments and accounts. Electronic trading documents.
e. Access codes and passwords to accounts – in this digital age this is becoming of increasing importance.
f. Details of any litigations involving property rights, patents, artistic licensing, etc. Pending law cases, for example wrongful death, malpractice, etc. Issues of payouts for pending lawsuits.
g. Loans, lease agreement, rental agreements, co-signatures, pending insurance claims. Claims against property, for example liens.
h. Medical bills
i. Insurance premiums
E. Seeking Advice and Counsel
a. Experienced Wills and Trust attorney
b. CPA, financial advisor, tax attorney
c. If real estate is involved – a real estate advisor
F. Filing for Probate
The advice of an experienced attorney is beneficial.
G. Filing for Benefits (military, private, corporate, spousal and other) of the Deceased
a. Life Insurance Benefits, including Long Term policies
b. Retirement plan proceeds and annuities
c. Military benefits
d. Employee IRA’s, etc.
e. Social Security ‘burial’ benefit
f. Issues of “wrongful death” lawsuits – require the advice of an experienced attorney
g. Issues of the payout of lottery winnings and other “windfalls” – require the advice of an experienced attorney
H. Monitoring Change of Ownership of Properties
a. House title, including any foreign owned; property shares, vacation property and time shared ownership. (Is there any special situation, for example a ‘reverse mortgage’ situation).
b. Bank Accounts, safe deposit access and credit cards. Computer access codes and passwords.
c. Assets: Autos and other vehicles for example trucks, boats and planes.Real estate (land); art and antique collections and other collections of value; jewelry. Obtain recent valuations for these items. Secure items and make sure all property is insured until it is transferred, since it can be lost, stolen, removed or damaged. Obtain copies of any rental/lease agreements involving assets.
d. Stocks, bonds, electronic trading accounts and other investment vehicles including stock options
e. Discontinuance/change of services – utilities, telephone; cell telephone, subscription services (including cable television subscriptions) etc.; credit cards and airline mileage accounts. Leases on equipment and purchases made over time e.g. computer equipment purchased on two year contract or a three year cell telephone contract.
f. Special attention has to be given in instances where there is property such as leased land, farmland, agricultural land, ranches, livestock, undeveloped property , mining rights, gas rights.
g. If there is a family business – the situation should be reviewed with the help of an experienced attorney.
h. Special issues of mileage/reward programs benefits
I. Special Arrangements – Are there family members of the deceased for whom special arrangements have been made? An example of this would be an adult child who is disabled and has a “special needs trust” or a spouse in a nursing home.
J. Proceeds/Distribution to Beneficiaries
a. Under statutes there will be specified time periods to accomplish the duties of finalizing the Estate. In some cases, depending on law, there will be advisability of retaining funds for any ‘unforeseen’ future demands that could be made upon an Estate.
b. There is an entire sub section of law with regard to a ‘contested’ will – if this is the situation, seek the advice of an experienced attorney
K. Payment of Outstanding Taxes/Debts
a. Review of finances with a qualified professional
L. Special Situations of Insolvent Estates
What happens if there are not adequate proceeds (value) in the Estate to cover expenses? Such an Estate is considered insolvent. An example of this would be if there are back taxes or other debts that are unpaid and must be paid from the Estate. If the taxes/debts owed are more than the value of the Estate, the Estate can be considered insolvent. In this situation, the executor’s role becomes more complex. The advice of an experienced legal professional is usually most helpful.
M. Liability – What liability does the Executor have when carrying out his/her duties?
a. Consult with an experienced attorney about the legal issues/responsibilities of being an Executor.
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