Serving as an executor can be like having a second job. The size of the estate and your relationship to the deceased can make it a bit overwhelming, especially for adult children handling the estate of their last surviving parent. Those executors typically distribute not only financial assets, but decades of personal property, says the article “What to Do When You’re the Executor” from Yahoo! Finance. If the family is prone to arguments, or the estate is large, or both, the job of the executor can be even more challenging.
The first thing to do is obtain the death certificate. Depending on your state, the funeral home or state’s records department in the location where the death occurred will have them. Get five to ten originals, with the raised seal. You’ll need them to gain control of assets.
Next, file the will and the death certificate with the county probate court. The deadline for filing the will varies by state. However, it can range from ten to ninety days to six months to one year after the date of death. If probate is necessary, you’ll also need to obtain a “Letter of Testamentary.” This court-created document says you are the legally authorized person to manage the estate. Until you have this letter, you cannot move forward with any of the assets.
Build your team of professional advisors. An experienced estate planning attorney will help navigate probate court. You may also need a CPA and a financial planner. If possible, contact the estate planning attorney who drew up the will, because they are probably familiar with the will, the estate and possibly with the deceased.
Inventory assets. After death is when we learn a lot about those we loved. Were they hyper-organized, keeping records in an easily understood system? Did they file insurance policies under “Insurance Policies,” under the name of the insurance company, or leave papers in a stack in no order whatsoever? Go through every box and file cabinet to make sure you don’t miss anything.
Protect personal property. If the estate included a home, you must make sure that mortgage and tax payments are made. If you don’t know who had keys to the house, investing in the services of a locksmith and a new set of locks and keys could save you from unscrupulous family members who believe certain items belong to them. If a car is sitting in the garage, it will need to be cared for and the title of ownership will need to be dealt with.
Obtain a federal EIN number from the IRS and use it to open an estate bank account. Until the estate is settled, the executor needs to pay bills and make deposits. A separate bank account prevents co-mingling funds, makes it easier to track transactions and is useful, if there are any challenges to your decisions as executor.
Pay any outstanding debts. The executor may be personally liable if debts from the estate are not paid before the estate assets are distributed. You’re also responsible for filing state and federal tax returns for the last year the person was alive, as well as a federal tax return for the estate.
To head off potential animosity, stay in touch with beneficiaries. Let them know what you are doing, especially if the process is taking a while. Keep excellent records to reflect your activities.
Distributing assets may require court approval, depending on where the decedent lived. If the will contains specific directions for personal items, you’ll be in better shape than if there are no directions. If not, review the inventory of assets to see how things can be equitably distributed. Don’t underestimate the emotional response to this part of the process. Families have battled over items of little monetary value.
It’s a good idea to get a release from beneficiaries acknowledging they have received their inheritance. An estate planning attorney can help with preparing the language to help minimize any challenges in the future.
One of the main goals of our law practice is to help families like your plan for safe, problem free, and successful transfer of assets to the next generation. Call our office today to schedule a time for us to review your estate plan and identify the best strategies for you and your family to ensure your legacy of love and financial security. Our office is located in Santa Ana, CA but we serve all of California including Irvine, Orange, Tustin, Newport Beach, and Anaheim.
Reference: Yahoo! Finance (Oct. 29, 2021) “What to Do When You’re the Executor”