The adjustment to the loss of a loved one is difficult, and unfortunately, one family member often has the added burden of acting as executor of the deceased’s estate. Essentially, an executor is charged with protecting a deceased person’s property until all debts and taxes have been paid, and with seeing that the remaining assets are properly distributed to the heirs. Even if the estate is not large, the process still takes time and can be overwhelming.
In an effort to help future executors know what to expect, we have created a helpful list that outlines key duties of the executor.
1. Obtain a copy of the latest version of the will.
Read through the will and do your best to understand the instructions provided. If in doubt, you can always utilize the expertise of an estate planning attorney to help decipher the instructions.
2. File a petition.
If necessary, file a petition with the court to admit the will to probate.
3. Notify banks, credit card companies and government agencies of the decedent’s death.
The Social Security Administration, along with the decedent’s bank and credit card companies and the Office of Veteran’s Affairs are a few examples of who should be notified of the death.
4. It is often advisable to set up an estate bank account to hold incoming funds and pay any ongoing bills.
An executor should be aware of mortgages, utilities and similar bills that still need to be paid throughout the probate process. Set up an estate accounting system at the beginning of the process. For your protection, keep records of all cash and other financial transactions of the estate and provide written accountings to the beneficiaries.
5. Create a list that identifies all assets.
You will need a thorough inventory if a probate court proceeding is required. This list is important as it will help to keep track of valuables, determine the transfer of assets due to titling, divide property among beneficiaries, and determine whether or not estate tax will be owed.
6. Notify beneficiaries named in the will or people entitled to inherit under state law.
If you need guidance, the decedent’s local court or a lawyer can help. If the estate goes through probate, you will be required to send notices to creditors.
7. Maintain property until it can be distributed or sold.
This is a key part of an executor’s job. You must keep real estate well maintained, small valuables secure, and everything of value insured.
8. Collect money owed to the estate.
This can include final wages or insurance benefits. The funds can be deposited into the estate bank account.
9. File final income tax returns for the deceased person.
A final income tax return must be filed, covering the period from the beginning of the tax year to the date of death. Do not hesitate to reach out to the decedent’s tax preparer as they can be a big help. If the estate is large, they can also advise you in the event that an estate tax return needs to filed.
10. Supervise the distribution of the decedent’s property.
The property will go to those named in the will or those entitled to inherit under state law.
While it is not possible in all situations, there is incredible value in spending time speaking with your loved one before their passing. This will allow you to clearly understand their wishes and might help in getting some of the necessary documents in order ahead of time. It is also important to note that each state has different laws that cover the probate process and requirements, so research is critical. We work with a number of highly qualified estate planning attorneys in the Denver metro area and are happy to provide a referral.
Andrea L. Blackwelder, CFP®, ChFC and Joseph D. Clemens, CFP®, EA are the founders and partners of Wisdom Wealth Strategies. Their shared passion is simple: to bring financial empowerment, understanding, and peace-of mind to people who wish to improve their financial future, build wealth for their families, and achieve financial independence. Click here to find out more about how you can work with Wisdom Wealth Strategies.