FAMILY- As people age and transition into a new phase of life, it’s common to revisit their overall financial plan. If you’ve been named the executor under your parent’s Last Will and Testament (the “Will”), chances are that they are preparing for impending lifestyle changes. As you explore your new role, you’ll find that it’s steeped in tasks that are both emotional and administrative.
As executor, you’ve been entrusted with the responsibility of carrying out a parent’s last wishes. Your mother or father has faith in your ability to carry out these wishes—and has put trust in you by appointing you as executor.
“The role of executor requires both emotional and administrative tasks — neither of which are always easy.”
This honor—and legal responsibility—involves taking care of financial obligations, including the payment of any debt and taxes, and then properly dispersing the remaining assets according to the directions spelled out in the Will. It also involves maintaining property until the estate is settled and making any required court appearances. Knowing and understanding these responsibilities is the first step to being prepared for the dreaded time when you must cope with the loss and the added burden of overseeing the estate process.
This checklist is intended to help you with that process:
1. COMMUNICATE. When you’ve been named an executor, the most important first step is to connect with your parent (while you still can) to ensure you fully understand his or her expectations. Review the Will now with your parent(s) and if anything is unclear, ask questions. For example, does it address the family business? What are the plans for any family heirlooms? Also, are all family members equally informed of your parents’ wishes? The more you communicate and understand the possible scenarios, the more you can share and put others at ease, doing your best to avoid any hurt feelings when the already painful time comes.
2. LOCATE THE WILL AND OTHER IMPORTANT DOCUMENTS. As executor, you must locate the original Will. It is a good idea to get it now and make sure you are keeping it in a safe place. In addition to the Will, the other documents that you may need include: Any trust documents; insurance policies; wealth manager contact information; brokerage and advisory account statements; bank account information; military records; information about and keys to any safe deposit boxes; deeds; pension statements; Social Security documents; credit cards and statements; and other financial and investment information.
3. OBTAIN COPIES OF THE DEATH CERTIFICATE. You need to purchase multiple copies of the certified death certificate—for banks, insurance companies, credit providers and others. Be sure to get at least 10 copies from your parent’s local municipal recording-keeping office (town clerk or county or state medical examiner’s office). Usually the funeral director can help with this.
4. DETERMINE WHETHER THE ESTATE MUST GO TO PROBATE. If your mother or father set up a living trust or certain other trusts, and transferred all of their assets to that trust, you may be able to avoid probate, which is the court process of getting assets to beneficiaries. Whoever is named as the trust’s successor trustee can distribute assets according to the trust without going through the probate process. If there are assets not held in trust, you may need to go through the probate process and prove the Will’s legitimacy. Depending on the estate and the complexity of the issues involved, the probate process can take months, even years.
5. FILE THE WILL WITH PROBATE COURT AND ALERT CREDITORS AND BENEFITS PROVIDERS. Even if probate isn’t necessary, the Will must be filed with probate court. As executor, you must also notify banks, credit card companies and government agencies, such as the Social Security Administration, of your parent’s death and provide a death certificate.
6. OPEN A BANK ACCOUNT TO PAY BILLS OR RECEIVE FUNDS. You need an account in the name of the estate in order to 1) deposit incoming funds, such as paychecks or other money owed to your parent, and 2) write checks to pay your mom or dad’s bills, including mortgages, utilities, and credit cards.
7. LOCATE, INVENTORY AND MAINTAIN YOUR PARENT’S PROPERTY. As executor, you also need to keep up a house or maintain other property until it can be distributed or sold, as well as keep secure all of your parent’s personal property, including anything in the home or a safety deposit box. Some states require a personal property inventory. Certain valuables might even need to be appraised.
8. PAY THE ESTATE’S DEBTS AND TAXES. Keep in mind that car payments, mortgages, and property taxes must be paid by the estate until the estate is settled, which is another responsibility of the executor. Be sure to go through checkbooks and bank statements to figure out what your parent had been paying regularly. In addition, if the income earned by the estate exceeds the applicable exemption amount, the estate must file federal and any applicable state, income tax returns. Finally, even if there is no federal estate tax due, there may be a state death tax. Estate tax returns must be filed within nine months of the date of death.
9. DISBURSE AND DISTRIBUTE THE ASSETS. Finally, once all debts have been settled and you’ve paid any estate taxes and all other bills, it is time to distribute the assets of the estate—property, stocks, bonds, cash and other items of value—to all the beneficiaries, as specified in the Will or if there was not Will under applicable state law. Be sure to get receipts from the beneficiaries to prove they are in receipt of their distributions. The executor is responsible for disposing of anything left following all debt payments and distributions to heirs.
10. GET HELP. There is no need to go it alone. Speak with an attorney, accountant, tax advisor and/or your or your parent’s financial advisor to help you understand and navigate this often complicated process.
Handling the complex process of executor duties during an emotional time is a challenge even for the strongest person.
Kathleen is recognized as a 2019 MAKER by Morgan Stanley Wealth Management in partnership with MAKERS, a project dedicated to identifying and celebrating women of accomplishment across multiple fields. She continues to be named to Barron’s and Forbes Magazine’s top in industry lists connect with her at:
https://advisor.morganstanley.com/the-harmony-family-office
alena.ahrens@gmail.com
314-889-4862/14805 N Outer Forty Rd / Ste 200, Chesterfield, MO 63017, MO 63017
