You’re the Executor. What’s Next?

by: Jeff M. Brandon, Senior Wealth Planner

March 15, 2021

Cheryl had just changed clothes after a long day commemorating her sister Lucy’s life. There was a funeral and a reception, setting up beforehand and cleaning up afterward. Just as she sat down, the phone rang. It was a cousin, Bill, asking about Lucy’s will. Why was Bill calling Cheryl? Cheryl had been given the honor of being Lucy’s executor. Lucy trusted Cheryl, and Cheryl was always known to be very good with money. But now, Cheryl was already beginning to feel overwhelmed.  She had never handled an estate before.

Learning the steps of how to handle a person’s estate is often a trial by fire or learn as you go process.  It can be exhausting, frustrating and sometimes thankless. Heirs may be impatiently waiting to receive their inheritance, or there may be disagreement on what the deceased intended to bequeath. To top it all off, the executor gets to be mediator and expert, whether or not they feel qualified. This flowchart outlines the steps involved in being the executor of an estate. Each step is detailed below.

Where Do I Start?

Before any money can be moved or distributed, an official death certificate must be issued. The funeral home usually helps with this process, but it can be several weeks before the death certificate is issued. The attending physician or coroner must sign off on the cause of death and their schedules can be very busy. The funeral home usually notifies Social Security of the person’s passing, but check to make sure that the funeral home has done so. If you are the executor, start locating the will and any paperwork on assets and liabilities of the deceased while waiting for the death certificate.

Prove It!

In order to act as executor, you will have to go before the probate judge for your jurisdiction to have the judge approve that you are the executor who has been asked to act on behalf of the deceased. Depending on the state where the estate is located, there are several steps in the probate process that must take place. Most probate courts provide a list for the executors. If the deceased had an attorney they worked closely with, the executor can use the services of the attorney to help with the probate process and deduct the costs from the estate. The probate judge, once satisfied that you are the executor, will issue Letters Testamentary. The Letters Testamentary and death certificate are both required when dealing with financial institutions and government agencies to handle the deceased’s assets.

Who Do I Need to Contact?

After locating statements and reading the will, there are several professionals or institutions the executor will need to contact. This includes the deceased’s:

  • Employer
  • Financial Advisors
  • Insurance Agents
  • Banks
  • Accountant

Some accounts will immediately pay out to beneficiaries or joint account holders because the assets or benefits pass “outside” of the will or probate process. The executor will want to work with a local bank to establish a checking account for the estate to receive and disburse funds. If the deceased had investments that will pass per the will, the investment advisor will also set up an estate account to hold the investments.

Who Do I Pay and When?

Before heirs can receive final benefits from the estate, other obligations, liabilities, judgements, taxes and fees must be paid by the estate. What many beneficiaries fail to understand is that they can’t receive their “fair share” until other matters are handled. The executor does have the option to make partial distributions to the heirs if they feel there are adequate funds to meet the estate’s obligations. Estates can remain open for a year or more before they are completely settled. Executors are often surprised by medical bills, utility reimbursements, etc. that may arrive months later. Depending on the complexity of the estate, it is recommended that an estate bank account be kept open for a year or more to handle taxes due or any unforeseen items.

What Else Does the Executor Handle?

If the deceased also owned real estate or a business, the executor will be the point person for handling the sale or transition. For tax purposes, it is a good idea to get an estimate of the property’s or business’s value on the date of the deceased’s passing. The executor can try to handle the process alone or hire realtors or other professionals who provide needed expertise. Their costs are paid by the estate.

Who Can Help Oversee the Process?

There are attorneys who specialize in probating estates that you can hire, but their hourly charges can add up quickly. Trust companies can also be hired to help handle the process. For clients of Smith and Howard Wealth Management, our financial planners and client specialists work closely with your executors to make sure they understand their obligations and the steps to take. If you want to speak with our financial planners about your estate plan and having your executor prepared and positioned to handle your estate, please reach out to Jeff Brandon or Michael Mueller to schedule a phone call.