Planning is Peace of Mind

Estate Executors and Trustees: Tips & Rules to Avoid Common Problems

inheritance

If you have been named the executor of someone’s estate or the Trustee of a Trust, you may be unaware of all the responsibilities estate executors and trustees have. Many parents name a child as their executor or trustee, but seldom do children then do the necessary research to see what estate administration is all about – and when it comes time to take over these responsibilities, they panic or miss important deadlines and details.

Immediately following the death of the estate owner or trust grantor, executors/trustees should:

Secure tangible property.  It’s amazing how many things “walk away” from a decedent’s home right after they die.  Someone may feel that Aunt Betty would have “wanted” them to have the silver collection, so they just take it.  So it is important that executors secure all tangible property – especially if that property may require an appraisal – so they can plan for the distribution of the property as outlined in the decedent’s will.

Take your time.  After you have secured the tangible property, take a little time to grieve before worrying about most financial matters.  You will probably want to pay bills, but these can wait a month or two without repercussion.

However, you do need to notify Social Security within 30 days of the death.  Talk with your attorney to receive the guidance you need to properly administer the estate.  Any fees incurred will be paid out of the estate, not your pocket.  And the advice you get will be invaluable.  If you have prepared a plan with us, your executor will have a no-charge meeting with us and a special discount off of our regular fees.

Here are some general rules, which vary from state to state, for estate executors and trustees regarding the steps that need to be taken to properly administer the estate:

  1. Notify probate court.  You must file the will and petition at the probate court to be officially recognized as executor.  If there is no will, the heirs must petition the court to be appointed administrator.
  2. Inventory the assets.  You will need to compile a list of everything the decedent owned and provide that list to the probate court. 
  3. File tax returns.  You must file a final income tax return for the decedent.  If the estate has any assets that earn interest, you must file an income tax return for the estate. If the estate exceeds $5.12 million, you will need to file a federal estate tax return within nine months of the date of death.
  4. Distribute property.  After any creditor claims are satisfied and bills paid, you will need to distribute the remaining property to heirs.
  5. File a final account.  You must file a final account with the probate court in order to close out the estate.

If you would like to have a talk about estate planning and administration, contact us today at (888) 597-9685 to discuss your family’s specific concerns.

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