Managing Your Executorship Responsibilities

Well, we have reached the end of my Financial Readiness area of my website.  This section is here to help you navigate through the responsibilities following the death of your last parent, or other situation where you have been named, and accepted the executorship.  It is important to remember going into this that it is a process, and will take dedication and perseverance to tie up the seemingly infinite collection of loose ends you will encounter.  Take solace in the fact that you are managing a glacier, not riding a bull at the rodeo.

I am relaying some of the more important duties that we had to do in order to manage our parent's estates, but please do not rely solely on this recount to help you, as I am not an attorney, and your situation will probably be different, so consult yours.

Executorship Suggestions - Prioritizing your Responsibilities
The following duties are more or less in the order of importance and necessity, but your situation will probably require doing them, and other tasks not listed, in a different sequence.


Section Contents
​A) Executorship - General
B) Attorney, Letters Testamentary
C) Distribution of Personal Assets
​D) Notifications
E) Final Expenses of the Estate
F) The Internal Revenue Service and Establishment of the Estate
G) Wrapping Things Up
​

​A)  Executorship - General
​As discussed in Step I, Final Arrangements & Notifications in Section I of  Managing your Parental Financial Responsibilities, your first priority after a death is taking care of the immediate and necessary duties of burial and other final arrangements.  Early in the process you may be in a state of grief, so it is important to prioritze some of the tasks over others.

​B) Attorney, Letters Testamentary
Early in the process, I recommend contacting an attorney that specializes in estate planning.  Perhaps this is the same attorney who has drafted up your Will, or the decedent's will.

Items to Bring to the Attorney

• Your Identification
• The Will and any Codicils
• Power of Attorney
• Inventory of Assets
• Death certificate
• Copy of decedents Social Security Card
• Decedent's identification (Driver's License, Passport, Legal Photo ID)
• List of Questions

While visiting the attorney, they will review the will, and determine who is the legal executor.  They should also explain the process and legal aspects to fulfilling your executorship duties.  First and foremost, as executor, you are bound to administrate the will honestly and impartially.  Ethics are an important aspect of your title.  One of your primary duties is to protect the Estate from loss of value  You also have to act in the best interest of the heirs and estate.

The attorney will then draft up what is known as the Letters Testamentary.  The letters are legal documents and name the executor of the estate, and in my case at least, the beneficiaries named in the will.

A judge will sign the letters and file them with the county's superior court clerk whereas you will become the estate's Personal Representative, and now are legally authorized to administer the Will according to law.  You will receive certified copies of the Letters.  Some institutions that you are going to deal with will need a copy, as well as a certified copy of the death certificate to begin the process of asset distribution.  In my experience, a photo copy of these documents was usually fine.

The attorney should also file for you a Notice to Creditors in your legal newspaper.  This is basically an advertisement for anyone that has outstanding claims against a decedent must present that claim within certain time guidelines, and if those conditions are not met, the claim is forever barred unless as otherwise legally provided in the statutes.

Your attorney will also probably give you a letter on how to initiate the probate.

Remember, when you are talking to the attorney, whether on the phone or in person, you are probably on the billing clock, so keep things mostly to business.
​

​C) Distribution of Personal Assets
As Executor, it is your responsibility to draw up an inventory of assets for their equitable distribution.  Example here.  This listing is required to be developed within the first 90 days from the appointment as personal representative and should be available to other interested parties, should they request it after that 90-day period.  Failure to timely prepare and produce and inventory upon request is grounds for your removal as personal representative.  Hopefully your decedent took care of some of this in their financial recordkeeping.  A certain level of detail is good, such as serial numbers on weapons, descriptions of individual jewelry pieces, etc.  Other less valuable household items may not be inventoried, unless unusually valuable.

Assets should be separated between probate and non-probate items.  Generally, non-probate property is those assets that pass directly to a beneficiary or joint account holder, outside of the will (e.g. these could be bank accounts, contents of a safety deposit box, or investments (IRA's, Stocks & Bonds, e.g.) that already have named beneficiaries on the account).

Perhaps the most important thing to develop is a detailed list of the Financial Assets.  I recommend working up a spreadsheet, or other similar grid of every financial asset that the decedent has by Institution, and the fair market value at the time of death.  Your fellow heirs have a stake in this, so be thorough and accurate.  If you have been taking care of a parent's finances, hopefully you will already have this!  You could also put the contact information and account numbers on this list, but your heirs wouldn't probably need this unless they need to contact the institutions on their own, which they will probably have to do if they are listed as a beneficiary.

In my case, it was necessary for siblings to contact the investment companies to establish an account in their name before any assets could be liquidated, or rolled over into their new account with that company, or moved to a financial institution that they already had established.  In an effort to consolidate, I moved these assets into an account that I already had been established, and had a good working relationship with.  You will discover that some companies are better to work with than others.

Distribution of tangible personal property must be made consistent with the terms of the will.  If the will does not specify how tangible personal property is to be distributed, and the family is able to agree on distribution of tangible personal property, then the distribution may be made pursuant to such an agreement.  If the personal property is of significant value, or if there may be hurt feelings or disputes among the family, then it is a good idea to reach a written agreement as to these dispositions.

Regarding the physical items, your decedent may have drawn up a plan as to the distribution, as my parents did, if not hopefully the heirs can mutually agree on items through some sort of friendly bartering.  I do not have any experience with any disagreeable fellow heirs, but if you do then consult your attorney during your meeting to discuss the best strategy.

After the heirs have left with their loot, then you may be faced with the not so enviable task of clearing out the residence, and in many cases, the selling of the property.  Hopefully your parents or other loved one was not a pack rat, as even small apartments can be a significant amount of work to clean out and turn over.  With any luck, you have enlisted some sibling help with this task.  Some charities will pick up items, but you may end up having to do a lot of that yourself.

​For both of our house sales, we used Craig's Estate Sales.  They made things easy for us as they arrange and conduct a weekend-long estate sale, then have the house cleaned out, professionally cleaned, and ready to sell when they are finished.  They will also return personal items they may run across and give them back to you.  Could you make more money if you did this yourself?  Maybe, but somethings in life are better left to the professionals.  Besides, you are tired.

A final word on selling of the residence.  For the benefit of the new homeowner, leave them the following items if you have them:

• User manuals for any appliances
• Maps or pictures of any irrigation projects that have been made
• Any keys (& use) that you have in your possession as well as garage door openers
• Any other non-sensitive items that only belong with the house

​​D) Notifications

General
​Assuming you have moved passed the important steps of final arrangements, it is time to get to the business of your executorship.  Your parent or loved one probably left a larger footprint out in the world than you know about, so it is your job to find out all of the aspects of their life that need to be closed.  Probably my best tip at this point is to make detailed lists of who to contact.  Before you do this, make sure to have this information on hand at all times:

• Your parent's full name
• Date of birth
• Date of death
• Address on record
• Phone number on record
• Social Security number
• Account numbers
• Passwords for any online accounts​

​Find out if beneficiaries are listed on the financial accounts.  Either way, they may have to create new accounts in their names for any distributions.  Some companies are easier to deal with as there are many barriers of security.  Forms may be securely sent via paper & USPS, or online.  Frustrating process!  As executor, you will probably have to open the keyholes by providing names, addresses, ss#'s, phone numbers, email addresses, etc.  Have fun!

Whether on a note pad, or on a spreadsheet, you absolutely need to create a list of the constellation of who you need to notify.  On your list, also write down contact information such as the address, phone number, account information, and contact person  if there is one.  Some accounts (IRA distribution, e.g.) will take more than one call to close down, so this step will help you stay organized.  Keep notes.  This list may include some of the following:

• The Social Security Administration, including Medicare
• Assisted Living facility if applicable
• Post Office for change of address so you can receive their mail (including junk!)
• Supplemental Insurance provider
• Life insurance provider
• Renter's insurance provider
• HR Department if employed, or for other benefit administration
• Banks and other financial institutions
• Investment companies where the decedent had they IRA's, stocks & bonds, e.g.
• Attending church (for tithes or endowment requests)
• Utilities & telephone (some will require selling property first)
• County Auditor to cancel voter registration
• Credit Card companies
• Physicians, including optometrist and dentist
• Pharmacies
• Dial-a-Ride
• Miscellaneous subscriptions (Sirius, Kindle, newspaper, Life Alert, etc.).  Especially the auto-pay ones.  This also includes closing social media accounts like Facebook, Instagram, personal websites, etc.
• Escrow items (Property tax, irrigation, homeowner's insurance)
• ​Social Media Accounts (to close)
  

A good way to find out the constellation of bills that the decedent was responsible for is to scour the last year's worth of bill paying through check registers and bank statements (paper, or online).  It could be too, that there is a filing cabinet with this information in it too.  On that note, if your parent has kept good records, go through them, as it may reveal accounts or other items that need to be addressed.

​E) Final Expenses of the Estate
You must keep a written check register for all checks you write as personal representative.  You must also keep a copy of all invoices, bills, statements, and receipts for any checks you write.  This will enable you to prepare a final accounting, if necessary, and will also demonstrate that you have only used estate funds for estate purposes.  You are not permitted to use estate funds or property for your own benefit or gain.  You must only use estate property and funds for estate purposes.  to do otherwise subjects you to monetary sanctions and removal as personal representative.

It is recommended that you keep cash payments to a minimum.  If you must pay bills in cash, YOU MUST KEEP RECEIPTS.  Cash payments will result in more confusion for everyone because it is more difficult for you to demonstrate that you spent cash for estate purposes only.  If you advance any of your own funds to pay Estate bills, you must keep receipts or you will not be reimbursed.

Make sure not to procrastinate, and pay all bills in a timely manner, and close out each account as you are able.  Do not ignore any claims against the Estate.

A note on bill paying.  Since we were "joint owners" on our parent's bank accounts, we were able to use those accounts to do the majority of the financial transactions.  You will need the estate bank account to collect any payments that are made directly to the estate (proceeds from sale of house, vehicle e.g.).  Or, you may elect to run all financial transactions through the estate's established bank account.  This may involve the closing of all accounts and transferring of joint assets into the estate account.  Bills will be paid from this account as well.  You will need to go this route if weren't a joint owner with your parent's bill paying checking account.  For us, it was a good thing to be on our parent's accounts as owners, as you have much more leverage with the bank, and we were ready from day one to pay final costs including funeral expenses.   No matter the route you take, do not co-mingle the Estate's finances with your own.

​F) The Internal Revenue Service and Establishing "The Estate"

Some general IRS information regarding your duties as estate administrator can be found here.

Step one is contacting the IRS, and applying for a Tax Identification Number (TIN) for the estate.  It is fairly easy to do, and it is free.  Click Here for Application.   Be careful to avoid the sites that charge you a fee for this. The name of the estate should be: "THE ESTATE OF MARY JANE DOE, JOHN THEODORE DOE, PERSONAL REPRESENTATIVE".  Be certain NOT to use your Social Security Number for the Estate account.

If the account holder did not take their Required Minimum Distribution from their IRA while they were alive, then it must be done by December 31st of the year the account holder died.  IRS guidance here.  In the event of the IRA being rolled into an inherited IRA, current IRS rules required it to be distributed within certain limitations.  Guidance here. 

You will need the estate's new TIN to open a bank account to collect assets and pay bills, as well as the filing of the tax returns:
​
Taxes
The IRS sees the decedent and the estate as two separate entities, therefore two tax returns will need to be filed.  When I did this, *TurboTax helped prepare the returns, but you cannot file these electronically, only via paper copies and the USPS.   With your returns you will need to include the IRS Forms 1099R , IRS Form 1310 Statement of Person Claiming Refund Due a Deceased Taxpayer, and a copy of Letters Testamentary.  Don't forget about making quarterly estimated tax deposits if necessary.
​
*TurboTax requires the Business Edition to fill out Form 1041, the return for the decedent's estate.  The 1040SR (the Form for when the decedent was alive during the year) was found in the TurboTax Premier.  I'm not sure if it is in other versions.  Check before you buy.
​
In many (or most?) cases, having a tax professional prepare the taxes of the decedent would be the best and safest thing to do.

G) Wrapping Things Up

FINAL DISTRIBUTION AND CLOSING OF THE ESTATE
Once you have completed the inventory, distributed or otherwise disposed of tangible personal property, liquidated any assets to be sold, and have completed all tax returns, then it is time to make a plan of final distribution and to close the Estate.  Some estate distributions are done all at once at the very end, and in this case you may want to consult your attorney for help.  After a final distribution plan is drawn up, your attorney will prepare documents (Notice of Filing Declaration of Completion of Probate and Declaration of Completion of Probate (for WA St at least)) to close the estate and file them with the court once you have reviewed and signed them.  As always, your attorney is the person to contact with regards to your personal situation.

Remember too, to be supportive of your spouse or partner during their performance of their executorship, as it may involve many trips to financial institutions, cable companies, the Post Office, etc., and your cheerful company as well as your help with other tasks will be greatly appreciated. 

The Letters Testamentary are no longer valid once the estate has been legally closed.

COMPENSATION FOR YOUR TIME
You are entitled to be compensated for your time and your expenses.  If you desire to be compensated, you must keep records of your time and your expenses.  You should keep written records of all activities (such as mileage when you take care of Estate business).  This not only establishes your expenses and time, it shows the Court that you have  been performing your duties as Personal Representative.  Total compensation cannot exceed 2.5% of the gross inventory (excluding IRA & other non-probate assets).  This is an area that could be kind of sticky, so to avoid hard feelings and resentment,  it may be a good idea to discuss any compensation with the beneficiaries of the will.  You do need to be aware that if you are compensated for your services, this is income to you and it must be reported to the IRS as taxable income.  

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