By Ron Dorner
There is one job that few of us will hold; yet it is truly the job of a lifetime. That job is being executor, or trustee, of a loved one’s estate.
Perhaps you have been designated for this task by a loved one or you may be asked to accept this responsibility in the future. It is wise to understand the requirements before you accept the responsibility.
As executor you will be held legally responsible for following the expressed wishes of the deceased as well as abiding by the laws of the state in which the deceased lived. Upon the death of the individual, the executor becomes the person responsible for all assets and debts of the deceased. No individual other than the executor should have access to the estate assets until a full accounting is made. No assets should be distributed until the debts of the estate are known and you are assured there are adequate assets to pay the debts.
The executor must locate all assets and determine all debts of the deceased. To understand what the deceased has, and what he or she owes, it is best to have discussions with the testator (maker of the will) before his or her death.
Being an executor includes several phases–search, organize, pay, and distribute. The entire process usually is concluded within nine months to one year. The executor is entitled to fees for the work, with the fee schedule set by state law.
SEARCH — In this phase your task is to find everything relating to the estate. This includes the most recent will (if there is one), all assets, all debts, and locating the heirs.
As soon as the will is found, you should open a probate case in court. Obtain certified copies of the death certificate from the funeral home. These will be needed by life insurance, mutual fund, and banking companies. Order twice as many as you think you will need.
Have the deceased’s mail forwarded to your address. Check for evidence of debts and accounts. Hold all bills and do not pay even a phone bill until the entire debt picture is known. State law determines which creditors have priority. Notify Social Security if benefits are being received. The check received in the month of death must be returned to Social Security.
Search the home of the deceased carefully to locate evidence of debt as well as assets. The law will require you to advertise notification of death so creditors can make claims. This is usually a 90-day process.
ORGANIZE — You will be handling many details. Immediately buy a notebook and start writing down everything. When speaking to a party on the phone, be sure and get the person’s name, phone number, company name, address, and write down what was said.
Log each debt you find as well as each asset. Be specific with details. Open a bank account for the estate to accumulate life insurance proceeds, interest checks, etc. You will use this account to make debt distributions later.
Apply to the IRS for a taxpayer ID number. The estate is a separate taxpayer and forms may need to be filed within nine months of death.
PAY — You will submit to the court a list of debts and the court will direct how and when to pay the creditors. Usually the final medical expenses and funeral expenses take first priority.
DISTRIBUTE — After all obligations of the deceased are paid, distribution is made to the heirs. It is important to follow the provisions of the will carefully.
Most executors hire an attorney to help them through the maze of activity necessary to probate a will successfully. It can be done without legal advice, but remember the law holds you, the executor, responsible.
So the question is, “Do you want the job of a lifetime?” There can be great comfort and blessing in doing this service for a loved one. Now you have a glimpse of what is involved.
Ron Dorner has worked in Grace Brethren financial and estate planning for more than 17 years. For more information, or to schedule a Financial Planning Seminar in your church, e-mail firstname.lastname@example.org.