Q: What do I have to do if I am Executor of the estate for my parent, spouse, or sibling?
A: Being an executor can be a big job, depending on the assets in the estate and the family dynamics. This is a general list of the tasks required.
1. Finding the Last Will and Testament and hiring a lawyer to help with the probate and estate administration.
2. Probating the Last Will and Testament in Probate or Chancery Court with help of the estate lawyer.
3. Gathering and protecting estate assets. You can do this once you have Letters Testamentary from Court showing legal authority to collect assets. Also requires getting a tax ID number and opening a bank account for the estate.
4. Making an inventory of estate assets. Make sure you identify and collect everything the deceased person owned. Good record-keeping is a big part of the job.
5. Determining value of estate assets. You must determine value of each asset on the date of death. This information gets reported on estate and inheritance tax returns.
6. Acquiring legal title to assets in the name of the estate. For stocks and bonds, this means a lot of paperwork required by stock transfer agents and financial institutions.
7. Paying debts, taxes, and estate expenses. These must be paid before anything is distributed to beneficiaries.
8. Deciding what cash is needed to pay debts, taxes and expenses, and raising the cash by selling assets if necessary.
9. Making decisions on tax issues. Some decisions can be made after death that will save taxes for the beneficiaries. Getting good tax advice from a lawyer or accountant is important.
10. Filing tax returns. Several tax returns may be required: individual 1040, federal estate tax return, state inheritance tax return, estate income tax return for each year open.
11. Keeping beneficiaries informed of your progress in the estate administration. The best way to avoid conflict and misunderstandings among beneficiaries is to keep everyone fully informed.
12. Managing estate assets. Some estate property (like clothing) may be donated to charity. Other tangible items may be divided between beneficiaries or sold at an estate sale. Real property may have to be readied for sale and put on the market.
13. Paying bequests. Specific bequests to individuals or charities are usually paid before the residuary beneficiaries receive their share.
14. Transferring assets to Trustees (if required). Sometimes the Will directs that a trust be created to hold assets for the benefit of a surviving spouse or children. The Executor must make sure that the Trustee receives those assets.
15. Preparing Final Accounting and distributing all estate assets. Wrapping up the estate requires accounting for all of the estate assets and making final distributions to the beneficiaries.
The job can take anywhere from a year to several years depending on the estate and any problems encountered during the administration process. This is a job that requires follow-through, attention-to detail, perseverence and good organization.