Whether you’re planning ahead for your own heirs or have been asked to serve as an executor for someone else, it pays to understand what the role requires. The executor shoulders the fiduciary responsibility to keep track of all assets and debts for the deceased person and executes the instructions in the will for disposing of the assets. Claims against the estate could become the executor’s personal responsibility if funds aren’t handled correctly, says Hugh Drake, a partner with the Brown Hay & Stephens law firm in Springfield, Ill. The job can be a steep learning curve, especially if you know little about the deceased person’s possessions, the scope of the estate, or where important papers were kept. Here’s a step-by-step guide of what the executor will need to do.
Key Points
- Executor Responsibilities: Executors have fiduciary duties and must manage and distribute the estate’s assets according to the will.
- Legal and Financial Tasks: Executors handle various legal and financial tasks, including filing forms, managing accounts, and distributing assets.
- Importance of Organization: Effective executors are organized, detail-oriented, and methodical.
Important Definitions
- Executor: The person appointed to carry out the instructions in the will and manage the deceased person’s estate.
- Probate: The legal process through which a deceased person’s will is validated and their assets are distributed.
- Testator: The person who has made a will or given a legacy.
Steps to Being an Effective Estate Executor
1. Get on the Same Page
The first step for executors is to thoroughly read the will to understand the testator’s intentions. This may involve interpreting the legal language and determining how the assets are to be distributed. It’s beneficial to have a letter of direction from the testator, which provides additional context and personal wishes not formally included in the will.
In Depth:
Understanding the will is critical because it outlines the specific wishes of the testator regarding asset distribution. This includes any unique bequests, charitable donations, and special instructions. Consulting an estate attorney can provide clarity on legal terms and ensure correct interpretation. The letter of direction can offer insights into the testator’s values and intentions, guiding the executor in making decisions aligned with their wishes.
2. Meet with the Family
Next, the executor should meet with the family and other beneficiaries to explain the contents of the will and the process ahead. Transparency can help prevent disputes and confusion later on. Some executors find it helpful to have annual family meetings before the testator passes to ensure everyone understands the estate plan.
In Depth:
Holding a family meeting can manage expectations and provide clarity on the probate process. Presenting the will and discussing the testator’s wishes, the probate process, and the timeline for asset distribution can prevent misunderstandings and conflicts. Gathering additional information or documents from the family that might be relevant to the estate is also beneficial.
3. Take Inventory
Taking a comprehensive inventory of the estate’s assets is crucial. This includes listing all accounts, properties, personal belongings, debts, and liabilities. Gather all relevant documents such as tax records, insurance policies, and account statements. This step ensures nothing is overlooked and provides a clear picture of the estate’s value and obligations.
In Depth:
Creating a detailed inventory involves identifying and valuing all assets and liabilities, including real estate, bank accounts, investment accounts, personal property, vehicles, collectibles, and business interests. Identifying and listing all debts, including mortgages, credit card debts, and personal loans, is essential. This inventory will be used throughout the probate process to ensure all assets are accounted for and properly managed. Professional appraisals may be necessary for certain assets to determine their fair market value.
4. Change the Locks
Securing the decedent’s property is essential to prevent unauthorized access or theft. Change the locks on the decedent’s home and any other properties. This action helps preserve the estate’s assets until they can be properly inventoried and distributed according to the will.
In Depth:
Changing the locks on all properties owned by the decedent prevents unauthorized access and protects valuable and sentimental items from being taken or tampered with. It’s also a good practice to secure any vehicles, safes, or other locations where valuables might be stored. Document the condition of the property and its contents when you take control. If necessary, consider hiring a security service to monitor the property until it can be distributed or sold.
5. Order Copies of the Death Certificate
You’ll need multiple copies of the death certificate to manage the estate effectively. These are required to close bank accounts, transfer ownership of assets, and for various other administrative tasks. It’s wise to order more copies than you think you’ll need to avoid delays later.
In Depth:
Death certificates are necessary for a wide range of administrative tasks, including closing financial accounts, claiming life insurance, and transferring property titles. It’s typically advisable to order at least 10-15 copies from the funeral home or the local health department. Each institution you deal with will generally require an original death certificate, so having multiple copies on hand will facilitate a smoother process.
6. Consider Professional Help
Depending on the estate’s complexity, you may need to hire an attorney, accountant, or professional estate administrator. These professionals can assist with filing legal and tax forms, valuing assets, and ensuring compliance with state laws. Even if you don’t hand over all responsibilities, their guidance can be invaluable.
In Depth:
Hiring professionals can be crucial, especially for complex estates involving significant assets, multiple properties, or contentious family dynamics. An estate attorney can help navigate probate court requirements, file necessary legal documents, and offer legal advice. An accountant can assist with tax filings and ensure that all financial records are accurate. A professional estate administrator can manage the day-to-day tasks of the estate, allowing you to focus on broader responsibilities. These professionals bring expertise and can help avoid costly mistakes.
7. Create a Calendar of Deadlines
Creating a calendar with all critical deadlines helps keep the process organized. This includes deadlines for filing probate, notifying creditors, and submitting tax forms. State laws dictate many of these timelines, so familiarize yourself with local requirements and plan accordingly.
In Depth:
A well-organized calendar is essential to keep track of all the tasks and deadlines associated with probate. This includes dates for filing the will with the probate court, publishing notices to creditors, filing tax returns, and submitting court documents. Missing deadlines can result in legal complications, fines, or delays in the distribution of assets. Using digital tools or estate management software can help automate reminders and ensure nothing is overlooked. Keeping a detailed log of all communications and actions taken is also advisable for reference and accountability.
8. Open an Estate Account
An estate account is necessary to manage the estate’s finances. This account is used to pay debts, taxes, and expenses related to the estate. It also collects any income generated by the estate’s assets. Keeping all transactions within this account ensures clear and accurate record-keeping.
In Depth:
Opening a separate estate account helps maintain transparency and accountability in managing the decedent’s finances. Deposit all incoming funds, such as proceeds from the sale of assets or refunds, into this account. Use the estate account to pay outstanding debts, taxes, and any expenses incurred during the administration process. Keeping detailed records of all transactions will simplify the final accounting to the court and the beneficiaries.
9. Distribute Assets
Once all debts and obligations are settled, distribute the remaining assets to the beneficiaries as outlined in the will. Communication with the heirs about the process and timeline is crucial. You may also need to facilitate the sale of certain assets if specified by the will or necessary to satisfy debts.
In Depth:
The final distribution of assets involves more than just handing out inheritances. It requires careful planning and execution to ensure all legal requirements are met. Provide beneficiaries with a clear timeline for distribution and keep them informed of any delays. If selling assets is necessary, work with real estate agents, auctioneers, or appraisers to ensure fair market value is obtained. Once all assets are liquidated or distributed, prepare a final accounting report for the probate court and beneficiaries, detailing all transactions, expenses, and distributions.
Additional Information
- Communication: Keep clear and open communication with heirs and beneficiaries to prevent misunderstandings and conflicts.
- Legal Compliance: Ensure compliance with state laws and regulations throughout the probate process.
- Record Keeping: Maintain detailed records of all transactions, communications, and decisions made during the administration of the estate.
Frequently Asked Questions (FAQs)
Q: What is the first step after being appointed as an executor? A: The first step is to read and understand the will, ensuring you know the testator’s intentions and any specific instructions.
Q: Do I need to hire an attorney to probate the estate? A: The need for an attorney depends on the complexity of the estate and state laws. Simplified probate procedures may be available for smaller estates, but consulting an attorney is often beneficial.
Q: How do I keep track of all the tasks and deadlines as an executor? A: Creating a calendar of deadlines and using a centralized system to manage accounts, tasks, and records can help keep everything organized.
Q: What if I can’t find the original will? A: If the original will is lost, you may need to replace it with a new, original will that explicitly invalidates all prior wills.
Q: How should I handle conflicts among heirs? A: Clear communication and a methodical approach to distributing assets can help prevent conflicts. Involving a neutral third party or mediator can also be beneficial in resolving disputes.
Take Action Now
If you need assistance with estate planning or have questions about being an executor, contact me today. At Supernus Law, we specialize in creating comprehensive estate plans and guiding executors through the probate process. Schedule a consultation with me, Jedediah McClure, to ensure you fulfill your duties effectively and efficiently.
Contact Information: Phone: (618) 354-0302 Email: jed@supernuslaw.com Website: Supernus Law Website
Don’t let the complexity of estate management overwhelm you. Let’s work together to ensure a smooth and efficient probate process, providing peace of mind for you and your family.DISCLAIMER This post is for informational purposes only and is not intended as legal advice. Please do not act or refrain from acting based on anything you read on this site. You should always seek competent legal counsel before taking any legal action. Using this site or communicating with the Supernus Business & Law Center, LLC through this site does not form an attorney/client relationship.
