The estate executor or personal representative is one of the most important roles in managing a loved one’s estate after death. Serving as an executor comes with many responsibilities, but knowing what to expect will make the transition into this important role much easier. The following checklist can be helpful in organizing your efforts.
The first step an executor should take is to look for records and important documents that relate to the deceased’s estate.
The common places to look for records
- Personal filing cabinets: Many people keep physical copies of financial records in a home filing cabinet, safe, or in other types of physical storage. Financial records might also be kept near areas where bills are paid in the home.
- Electronic storage: Search through the deceased’s home computer, laptops, and other electronic devices for folder names that might relate to the estate. A good place to look on a computer include the “my documents” and “downloads” folders on PC or Mac. Important files are often times kept in storage devices such as an external hard drive or USB thumb drive.
- Mail: Look for correspondence from banks and other investment companies. These institutions will periodically send financial statements or even checks.
- E-mail: Financial institutions will often regularly send online statements through e-mail. These e-mails may also come with financial records and other statements.
- Safe deposit boxes: One of the most common places in which files are kept includes bank safe deposit boxes. To open these boxes, a bank officer may need to be present for the executor to take an inventory of the box’s contents.
- Tax returns: certain assets are often listed on tax forms such as the IRS Form 1040.
- Financial Management Software: Check the deceased’s computers for software such as QuickBooks and Quicken. These programs might have a list of accounts and a summary of the account’s transaction history.
Actions the Executor should take
- Hire an attorney with estate managing experience. This attorney must be licensed in the deceased’s state of residence.
- Acquire an EIN, or an employer identification number. This EIN is required to report to the IRS on the estate’s activities and payments.
- Contact all beneficiaries named in the will. The executor should inform the beneficiaries of their inheritances. The executor can also help the beneficiaries determine whether they should disclaim any benefits.
- Appraise critical estate assets. Important assets that should be appraised include real estate, jewelry, and other high-value items.
- Collect any unpaid receivables. Examples of unpaid receivables might include salary, employee benefits, and other benefits received at death.
- File for any government provided death benefits. Contact the social security office to determine if the deceased was owed any benefits.
- Determine the cash requirements for the estate’s expenses. The executor should set aside money to pay any claims against the estate such as taxes, liens, debts, and court judgments.
- Consult an estate tax advisor. This should be done to determine whether the estate is subject to federal or state taxes. A tax advisor can also help to reduce the estate’s tax burden.
- Pay all debts and expenses of the estate. The executor should record all payments if advised to do so by the estate attorney. The executor may be required to prove all of the estate’s affairs are settled before the estate is allowed to make payments to the beneficiaries.
- File all necessary tax returns, and pay any due taxes. Necessary tax returns may include IRS 1040, 1041, and any state and/or federal estate tax returns.
- Pay benefits to the beneficiaries of the estate.
- Close any of the decedent’s remaining accounts.