At one time or another, we will all experience the loss of
someone we love. Dealing with that death is difficult because we
are not only dealing with our own emotions, but with those of
family and friends whose sorrow may be even more painful than
our own.
You may also have the responsibility to act as executor for the
decedent’s estate if you are a spouse, a son or daughter. While
it may be practical to say that everyone needs to make a will,
put their ‘final arrangements’ in writing and leave instructions
for the heirs, I’m sure it wouldn’t surprise us to learn that
many people do not take this sensible approach. Consequently,
after they die, their family members and friends proceed in a
state of semi-confusion trying to wrap up the decedent’s affairs.
If you are an executor and find yourself in a similar situation,
take heart. There are now more options available to you than
running off to the lawyer’s office. You have the option to hire
a lawyer to act as a coach and have him answer your legal
questions, do some research and review legal paperwork before
submitting them to the court or mailing them. Other options
include hiring a document preparation service, like DocuPrepUSA,
to prepare the probate paperwork and the myriad of
correspondence needed to wrap up the decedent’s affairs. If you
are the do-it-yourself kind, you can also consult some books
written for non-lawyers.
The Executor's Handbook, by Theodore E. Hughes and David Klein
(Facts On File) is a general but useful guide to an executor's
duties. How to Settle an Estate, by Charles K. Plotnick and
Stephan R. Leimberg (Plume) also has general coverage of
executor's duties, but the emphasis is on financial issues. So
review your options carefully, and if you choose wisely, you
will save yourself and your family a lot of unnecessary expense.
There are many ways to establish your assets prior to death that
would help your family avoid the expense of probate. First and
foremost, it will be the executor’s task to decide whether
probate court proceedings are needed. However, probate is an
entirely different matter that needs to be address in another
article. Let’s look at some of the duties we may not be familiar
with that are undertaken by an executor.
Giving Notice
Usually the Funeral Director orders as many certified copies of
the death certificate as you request. Sometimes, they even
notify the Social Security Administration too.
Here is a list of institutions that the executor needs to
contact in order to learn whether they want certified copies of
the death certificate:
a.) Every insurance company that insured the decedent (life,
health, auto, home) b.) Decedent’s pension fund c.) Each credit
card company used by decedent d.) Every financial institution
(banks, brokers) e.) Government agencies (Social Security, IRS,
Medicare, Veterans Affairs) f.) Title company that insured
decedent’s real estate
You can usually order extra copies of the death certificate from
the bureau of vital statistics in your state. If the decedent
owned property in another state, then a death certificate may
need to be recorded in the county where that property is
located. In many states, the death certificate is recorded along
with the deed of transfer.
Other Duties
An executor has a number of duties, the complexity of which
depends upon the deceased person’s estate. Typically, an
executor must:
Locate and secure the deceased person's assets and then sensibly
manage them during the probate process, which commonly takes
about a year. Depending on the contents of the will, and the
financial condition of the estate, this may involve deciding
whether to sell real estate or securities owned by the deceased
person.
Handle day-to-day details, such as terminating leases, credit
cards and other outstanding contracts, and notifying banks and
government agencies—for example, the Social Security
Administration, the post office, Medicare and the Department of
Veterans Affairs—of the death. Set up an estate bank account to
hold money that is owed to the deceased person—for example,
paychecks and stock dividends.
Pay continuing expenses—for example, mortgage payments, utility
bills and homeowner's insurance premiums. Pay any debts that the
estate is legally required to pay.
The executor must also notify creditors of the probate
proceeding. State law will define the required method of notice.
Creditors have a certain amount of time—usually about four to
six months—to file a claim for payment of any bills or other
obligations you have not voluntarily paid. The executor decides
whether a claim is valid. Pay income taxes. Federal tax returns
must be filed for the year in which the person died. Pay estate
taxes if necessary. It is unlikely, but state and federal estate
tax returns may be required. Only very large estates owe federal
estate tax; for deaths in 2001, if someone leaves less than
$675,000 worth of property, no federal estate tax is due. (And
any amount of property left to a surviving spouse who is a U.S.
citizen is estate tax-free.) This exempt amount is set to rise
until it hits $3.5 million in 2009, and the federal estate tax
is scheduled to be repealed in 2010. However, the tax will
reappear in 2011 unless Congress extends the repeal.
Most states do not collect estate taxes of their own, but take a
piece of the federal taxes due, if any. Some states impose
inheritance tax; rates depend on who inherits the property.
Check with your states' taxing authority. Supervise the
distribution of property—such as cash, personal belongings and
real estate—to the people or organizations named in the will.
When debts and taxes have been paid and all the property
distributed to the beneficiaries, ask the probate court to
formally close the estate. Being an executor involves lots of
details and handling many mundane tasks. So, some may think that
being meticulous is the most important attribute to look for
when naming the executor of your will. However, I think trust is
really the characteristic you want for your executor.
Others choose someone who stands to inherit a substantial amount
of their property. Naturally, a person with an interest in the
outcome is likely to be conscientious in managing your affairs
after your death. When you consider the alternative, that
executors are only paid a small percentage of the estate (the
exact amount is state regulated) you will want to choose someone
who will honor their fiduciary responsibility and is willing to
do the job.
Ref: Guiding those Left Behind in Pennsylvania, Amelia E. Pohl,
Esq. And Harold N. Fliegelman, Esq., and Nolo’s Encyclopedia of
Everyday Law, edited by attorneys Shae Irving, Kathleen Michon &
Beth McKenna
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