October 27, 2017. By Olga Okaty:

Being named the executor of a loved one’s Will is a role that entails tremendous trust and legal responsibility.  The executor (also known as a personal representative in some states) is entrusted to carry out the decedent’s last wishes, a duty that can often be highly emotional while requiring simultaneous focus on a multitude of administrative duties.  These can include resolving financial obligations such as debt and taxes, managing property until the estate is settled, attending court, and properly distributing any remaining assets in alignment with the decedent’s Last Will and Testament.

If you’ve been named executor of an estate, understanding your obligations well in advance is essential to being able to perform your future duties effectively while still coping with the loss when inevitably the time comes.  The following checklist offers a helpful step-by-step guide to assist you throughout this process:

    • Connect.  It is crucial that you speak with the testator (the person who made the Will) as soon as possible to discuss specific wishes and clarify any ambiguities.  Ascertain plans for any complex assets (such as a family business or shared vacation home) as well as for any special family heirlooms.  Discuss whether other family members or close friends have been notified of the testator’s wishes and decisions; this will help you better anticipate future conversations and reactions, and be better prepared to navigate any potential conflicts or disappointments.  Lastly, confirm that the testator’s original Will is safe and easily accessible to you.  Also be sure to obtain the contact information for all of the testator’s wealth managers, CPAs, tax advisors, insurance agents, and attorneys during this conversation. If they have a virtual portal where this information is stored, discuss how to securely access in a timely manner.
    • Obtain the original Will and other essential documents. When estate settlement begins, the first step as executor is to obtain the decedent’s original Will.  (It is essential to have the original, as most states will assume that a Will was revoked if no original can be produced, and if no witnesses can prove otherwise.)  Once you obtain the original Will, other important documents you should gather include: all brokerage, advisory, and retirement account statements; trust documents; insurance policies; bank account information and safety deposit boxes; credit card statements; statements for any outstanding loans; military records; deeds; pension and annuity statements; Social Security documents; and any other financial, investment, and benefit related information.
    • Purchase at least 10 copies of the death certificate. The decedent’s certified death certificate will be required by banks, insurers, financial companies, lenders, and other related parties; plan on obtaining at least 10 copies to ensure a smooth and timely estate settlement process.  The certified death certificate may be purchased from the decedent’s local town clerk or county/state medical examiner’s office.
    • Establish if the estate must go through probate. Probate is the legal court process of distributing assets to beneficiaries.  Depending on the complexity of the estate, the probate process can take from several months to a few years.  If the testator established a revocable living trust or certain other types of trusts, and all assets were transferred and retitled to those trusts, the assets owned by the trust prior to the testator’s death will avoid probate.  Other forms of ownership that typically avoid probate are 1) Jointly owned assets that transfer to the surviving owner, and 2) Assets that have a valid beneficiary designation, such as IRAs and other retirement accounts.  There are, however, exceptions under certain circumstances where such assets will not avoid probate.  You should contact the decedent’s estate attorney and wealth advisor to assist you with determining whether probate will be necessary.
    • If necessary, file the Will with probate court. As executor, you may need to file the original Will with probate court, depending on the complexity and circumstances of the decedent’s estate and the state in which it is being settled.  In certain situations, a Will may need to be filed even if the assets do not need to be probated (for example, to obtain the decedent’s medical records or file a lawsuit on behalf of the estate of the decedent.)  Always consult the decedent’s estate attorney first, to determine if filing the Will with probate court will be necessary.
    • Notify key organizations, companies, and agencies. As executor, you must alert and provide a certified death certificate to the following: any relevant government agencies (Social Security Administration, State Department of Motor Vehicles, etc.), financial companies (banks, credit unions, credit card companies, mortgage companies and lenders, student loan lenders, wealth advisors, investment brokers, pension providers), insurance and annuity companies (including life, health, medical dental, disability, and personal insurers), credit reporting agencies (Experian, Equifax, and TransUnion), and any clubs, unions, and professional associations of which the deceased was a member.  Additional government agencies that may need to be contacted, if applicable, include the Veteran’s Administration (if the decedent was a member of the military); Defense Finance and Accounting Service (if the decedent was a military retiree receiving benefits); Office of Personnel Management (if the decedent was a retired or former federal civil service employee); and the U.S. Citizenship and Immigration Service (if the decedent was not a U.S. citizen.)
    • Open an estate bank account to pay bills and accept funds. A bank account in the name of the estate must be opened in order to deposit any funds or income owed to the decedent, and to pay all of the decedent’s remaining bills, including credit cards, loans, and utilities.  The executor must continue to pay bills such as mortgages, property taxes, and car payments until the estate is fully settled.
    • Secure and manage all assets and property. As executor, you are responsible for locating, securing, and maintaining all of the decedent’s property, including houses and contents, personal property, and safety deposit boxes.  Depending on the state, you may be required to compile a personal property inventory; if significant art, jewelry, or collectibles are involved, a professional appraisal may be necessary as well.
    • Pay the estate’s debts and taxes. In addition to paying any regular bills (mortgages, property taxes, car payments, etc.) until the estate is settled, the executor must also settle any other debt the decedent had outstanding.  If the estate exceeds federal and state estate tax exclusion limits, the executor must also file the final federal and state income tax returns for the estate, within nine months of the date of death.  Certain states also levy death taxes which must be paid.  Be sure to reach out to the decedent’s CPA and wealth advisor to assist you in navigating these tasks.
    • Distribute the estate’s assets. Lastly, once all debts, taxes, and bills have been paid, the executor must now distribute all remaining assets of the estate (including property, investments and securities, cash, valuables, and family heirlooms) to the beneficiaries, as directed in the Will (or under applicable state law, if a Will did not exist.)  You should secure receipts from all beneficiaries to maintain as proof that they’ve received all due distributions.  Any property remaining following debt payments and distribution to heirs must be properly disposed of by the executor.

Overseeing the settlement of an estate during a highly poignant and emotional time can be overwhelming and stressful.  Never hesitate to reach out to trusted advisors, professionals, and counselors for help.  Our team at Centerpoint Advisors is well-versed in the estate settlement process and we are always available to provide support and help executors and families navigate this trying time.

Sources: www.Forbes.com, www.EstatePlanning.com, www.oprm.va.gov, National Funeral Directors Association (NFDA).