If you’ve been named as your parent’s executor, you’ll find it’s a role with both emotional and administrative tasks. Here are some key guidelines.
If you’ve been named the executor under your parent’s Last Will and Testament (the “Will”), it quickly becomes apparent that it’s a role with both emotional and administrative tasks. As the executor, you’ve been entrusted with the responsibility of carrying out a parent’s last wishes. Your mother or father has faith in your ability to carry out these wishes—and has put trust in you by appointing you as executor.
This honor—and legal responsibility—involves taking care of financial obligations, including the payment of any debt and taxes and then properly dispersing the remaining assets according to the directions spelled out in your parent’s Will. It also involves maintaining property until the estate is settled and making any required court appearances.
Knowing and understanding these responsibilities is the first step when preparing to oversee the estate process. This checklist is intended to help:
1. Communicate. When you’ve been named an executor, the most important first step is to have a discussion with your parent (while you still can) to ensure you fully understand their expectations. Review the Will now with your parent(s) and if anything is unclear, ask questions. For example, does it address the family business? What are the plans for any family heirlooms? Also, are all family members equally informed of your parents’ estate plan and the fact that you have been named as the executor? The more you communicate, the more you can share and put others at ease, doing your best to avoid any hurt feelings or conflicts.
2. Locate the Will and other important documents. As executor, it is your responsibility to locate the original will and submit it for probate. It is a good idea to get it now and make sure you are keeping it in a safe place. In addition to the Will, the other documents that you may need include: Any trust documents; insurance policies; contact information for your parent’s wealth manager, attorney and accountant; brokerage and advisory account statements; bank account information; military records; information about keys to any safe deposit boxes; deeds; pension statements; Social Security documents; credit cards and statements; and other financial and investment information.
The role of executor requires both emotional and administrative tasks—neither of which are always easy.
3. Obtain copies of the death certificate. You need to purchase multiple copies of the certified death certificate—for banks, insurance companies, credit providers and others. Be sure to get at least 10 copies. Generally, the funeral home can provide them, but you may also obtain the death certificate from your parent’s local municipal recording-keeping office (town clerk or county or state medical examiner’s office).
4. Determine whether the estate must go to probate. If your mother or father set up a living trust or certain other trusts and transferred all of their assets to that trust, you may be able to avoid probate—the court process of proving the Will’s legitimacy and then dispersing the estate’s assets according to the terms spelled out in the Will. Whoever is named as the trust’s successor trustee can distribute assets owned by the trust according to the terms of the trust agreement without going through the probate process. If there are assets not held in trust, you will need to go through the probate process, which, depending on various factors, can take months, even years.
5. File the Will with the probate court and Social Security and alert creditors. Even if probate isn’t necessary, it is generally best to file the Will with the probate court. As executor, you must also notify banks, credit card companies, the Social Security Administration and any other government agency that was providing benefits to your parent, of your parent’s death and provide a death certificate.
6. Open an estate bank account to pay bills or receive funds. You need an account in the name of the estate in order to 1) deposit incoming funds, such as paychecks or other money owed to your parent and 2) write checks to pay your mom or dad’s bills, including mortgages, utilities and credit cards.
7. Locate, inventory and maintain your parent’s property. As executor, you also need to keep up the house and maintain personal property until it can be distributed or sold, including any property kept in a safety deposit box. Some states require a personal property inventory. Certain valuables might even need to be appraised.
8. Pay the estate’s debts and taxes. Keep in mind that car payments, mortgages and property taxes must be paid by the executor on behalf of the estate until the estate is settled. Be sure to go through checkbooks and bank statements to determine what expenses your parent had been paying regularly. In addition, if the income earned by the estate exceeds the applicable income tax exemption amount, the estate must file federal and any applicable state income tax returns. Finally, even if there is no federal estate tax due, there may be a state inheritance or estate tax. All estate tax returns must be filed within nine months of the date of death.
9. Disburse and distribute the assets. Finally, once all debts of the estate have been settled and you’ve paid any estate taxes and all other liabilities of the estate, you can proceed to distributing the assets of the estate—property, stocks, bonds, cash and other items of value—to all the beneficiaries, as specified in the Will, or if there was no Will, to the heirs as determined under applicable state law. Be sure to get receipts from each beneficiary acknowledging they have received their share of the assets. The executor is responsible for disposing of anything left in the estate following the payment of all debts and the distribution of assets to the beneficiaries/heirs.
10. Get help. Handling the complex process of estate administration during an emotional time is a challenge even for the strongest person. There is no need to go it alone. Speak with an attorney, accountant, tax advisor and/or your or your parent’s Financial Advisor to help you understand and navigate this often complicated process.
Handling the complex process of executor duties during an emotional time is a challenge even for the strongest person. Connect with a Morgan Stanley Financial Advisor to help guide you through some of the steps you should be taking.