If someone asks you to be the executor of their estate, you may understand what you have to do in a general sense, but the specifics are another matter. With this in mind, we will look at some simple steps that you will have to take if you are administering an estate.
Identify the Document Itself
The first step is to get your hands on the will. Clearly, the person you will be representing should tell you where you can find a will when the time comes.
If this conversation never took place, you have to do it the old-fashioned way and go through all of the decedent’s important documents. Of course, if they have an attorney, you can contact their office to see if they can point you in the right direction.
Open the Estate and Notify Creditors
You cannot act independently if you are the executor of an estate. After you have possession of the document, you file it with the probate court. Depending on the jurisdiction, there may be a brief hearing, and you will be legally recognized as the estate administrator.
All final debts must be paid during probate, so the executor is required to notify creditors. This is typically done by posting a notice in a newspaper.
Open an Estate Bank Account
Since there will be debts that must be paid, you have to start an estate bank account if you are an executor. To do this, you must obtain an employer identification number from the IRS, but this can be done quite simply online.
Gather Relevant Documents and Inventory the Assets
Once you have completed the first two steps, it is time to tackle the hands-on tasks. You should gather all important documents related to the administration of the estate, like the titles to property and recent tax returns.
In a perfect world, there will be a letter of last instructions. This is a letter that is written by the testator to give the executor the information they will need to complete the necessary tasks.
This letter would include contact information for people that should know about the passing of the decedent, and the location of important documents would be shared.
The testator should provide access to accounts that are managed online, and other pertinent information should be passed along.
The assets that will comprise the estate should be identified and inventoried, and physical property should be secured. Financial institutions should be notified about the passing of the individual in question so the accounts can be frozen.
Place a Value on the Assets
You have to valuate the assets that will comprise the estate. It is easy to add up numbers on a spreadsheet, but appraisals may be necessary for some types of property.
This is rarely going to be a factor, but the value of the assets would be relevant from an estate tax perspective. Most people do not have to be concerned about this facet, because the first $11.7 million can be transferred tax-free.
Pay Taxes and Final Debts
The decedent’s taxes must be paid, and you have to satisfy all legitimate creditor claims. There will also be expenses that were incurred during the estate administration process, like appraisal fees, legal expenses, and accounting charges.
Distribute the Assets to the Heirs
The final step is going to provide family members with closure. When the court is ready to close the estate, you can distribute the assets to the beneficiaries in accordance with the wishes of the decedent.
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This is a basic outline of the way that an estate is administered when a will is used, but in fact, a living trust will be a better choice for many people. Plus, this is not the only type of trust that can be used, so you should make fully informed choices when you are planning your estate.
We can gain an understanding of your situation and your legacy goals and help you devise a plan that ideally suits your needs. If you are ready to schedule a consultation at our Cincinnati estate planning office, we can be reached by phone at 513-721-1513.
There is also a contact form on this site you can use to send us a message, and if you reach out electronically, you will receive a prompt response.
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