Working with clients throughout their lives means that we are often involved in the settlement of family estates. I may be a client's parent who has passed, their spouse or sometimes another friend or family member for which, our client has been named the executor of the estate. Probate laws vary a bit from state to state, however we are familiar with the Connecticut Probate process and work with many estate planning attorneys to help our clients through these difficult times. This article explains what you need to know if you've been named the executor of an estate.
The main responsibility of an executor of a will is to carry out the final wishes of the person who bestowed that position of trust. Usually, the executor is a close family member, but the executor could be a qualified, compensated person duly appointed under the laws of the state.
The Top Duties of an Executor Fall Into 5 General Categories:
1. Gathering the documents necessary for distributing the estate
2. Paying the debts and taxes and collecting from the estate’s debtors
3. Closing out the deceased’s insurance, retirement, and Social Security accounts
4. Maintaining the willed property prior to its disposal
5. Choosing the type of will probate and filing the will accordingly
Depending on the size of the estate, complications in probating the will, etc., the duties of the Executor can include much more. The Executor may require qualified legal assistance to navigate the complexities of probate and tax laws, for example.
Under ordinary circumstances, however, an executor can carry out the above general duties by taking the following actions:
1. Gather Necessary Documents
Secure copies of the deceased’s will, death certificate, deeds, trusts, insurance papers, etc. If required, obtain a court document that confirms the will is legal and valid and empowers the executor to administer the estate.
2. Close out the Deceased’s Financial Accounts
Contact the deceased’s banks, credit card account holders, and lenders. Gather information on mortgages, leases, taxes, etc. Settle any tax liens with the IRS or state tax authorities and obtain appropriate releases. Don't forget to also close out the deceased Social Security accounts.1
For deceased military personnel drawing retirement pay it is recommended that you immediately contact the Defense Finance and Accounting Service at 800-321-1080.2 Retirement benefits terminate as of the date the retiree died. Any payments made to the retiree’s account after the date of death will be recouped from the retiree’s bank account.
3. Organize the Deceased's Assets
This includes homes, vacation properties, cash and financial assets, and businesses. Locate, inventory, and safeguard valuable household and personal property. Prepare a detailed listing for the heirs and tax authorities.
4. Collect Money Owed to and Pay the Debts of the Deceased’s Estate
File or assist beneficiaries in filing for life insurance proceeds. When closing out the Social Security account, file for the deceased death benefit. Also, examine and adjudicate outstanding debts owed to the deceased as well as creditors’ claims against the estate.
5. Maintain and Get the Deceased’s Real Estate Property Ready for Sale
Make sure routine property maintenance and security occurs prior to disposition of the deceased’s real estate. Check for tax or mortgage liens against the deceased’s property. Get professional advice on what steps to take to ready the property for sale. When the property can be put on the market, contact a qualified realtor or determine a sales strategy.
6. Prepare a Strategy to Expedite or Avoid the Probate Process
With proper estate planning, it is possible to avoid, or at least minimize, the time and expense involved in probating a will.3 For example, life insurance proceeds, some retirement accounts, as well as jointly owned real estate, pass directly to the beneficiaries without going through probate. Other strategies, like setting up a revocable living trust, can expedite the transfer of assets and bypass probate completely.4
7. Good Planning Leads to the Best Execution
So, an executor can help ensure orderly and uncontested flow of assets from the deceased’s estate to the heirs with attention to detail and preplanning. That includes advice to and consultation with the testator before the time comes when the executor must carry out the sad and often stress-filled duties described above.
Reed Financial Planning Services, LLC is focused on the financial planning needs of people ages 50 and older and help them plan for retirement, plan for aging in retirement and plan for the transitioning of their assets (Estate Planning). If you have questions or need help with your planning, feel free to contact us at firstname.lastname@example.org or 860-430-1009.
This content is developed from sources believed to be providing accurate information, and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security.