ROLE OF THE EXECUTOR

The executor plays a crucial role in carrying out your final wishes after you’ve passed. This person will work closely with your financial advisor, attorney, and tax advisors to settle debts and distribute your assets as outlined in your will.

It’s important to choose someone you trust, who is capable, organized, level-headed, and self-aware enough to know when they need professional help. It’s not necessary to default to your spouse or oldest child if they don’t fit the bill.

It’s a good idea to explain to your loved ones who will oversee settling your estate and why, as this can help ensure that everyone respects your choice and moves past any hurt feelings. To make your executor’s job easier, it’s important to show them where you’ve stored your estate planning documents and other important legal documents, such as your Social Security card, bank records, and passwords to your online accounts. Additionally, introducing your executor to your financial advisor and attorney can be beneficial so that they know who to contact when the time comes.

GATHERING & VALUING ASSETS

After you pass away, your executor will need to gather your estate plan and take stock of your assets. In addition to personal items, the executor will also need to access financial accounts, property records, tax records, physical stock certificates, and safes or safety deposit boxes. Organizing these essentials ahead of time will make the process easier for your executor. Once all your valuables are accounted for, your executor will need to determine their worth for tax purposes. Items like jewelry, art, real estate, and vehicles may require professional appraisal. Your financial advisor should be able to connect your executor with reliable appraisers. At Keen Wealth, we also utilize comprehensive checklists during this process to help executors ensure they aren’t overlooking any property that needs to be assessed and/or distributed.

SETTLING DEBTS & TAXES

The executor must settle any outstanding debts of the estate before beneficiaries can receive their inheritance. This includes paying off credit cards, mortgages, and any other bills. Additionally, the executor should ensure that all accounts of the deceased are closed, and subscriptions and recurring charges, such as streaming services and utility autopayments, are canceled.

While estate tax regulations may differ by state, the IRS states that most “simple estates” do not need to file a federal estate tax return. Executors handling larger, more complex estates should seek advice from a financial advisor and CPA to minimize potential tax obligations for both the estate and its beneficiaries.

DISTRIBUTING THE REMAINING ASSETS

Next, the executor has ensured that all debts and taxes have been paid, they will start distributing the remaining assets according to the last will and testament.

The legal requirements for this process vary between states, and different rules apply to different types of assets. For instance, recent changes have affected how beneficiaries can inherit and access distributions from retirement accounts.

These distributions may also generate taxable income, which could be applicable to assets like real estate or collectibles that appreciate after inheritance.

Good communication between the executor and beneficiaries is crucial at this stage. The executor must be transparent about the progress of the process and how the last wishes are being fulfilled. Asset distribution often takes longer than expected, especially if the estate cannot avoid probate. In some cases, setting up meetings between beneficiaries and the deceased’s financial advisor can be beneficial in explaining how assets will be protected and managed through trusts and charitable foundations.

CLOSING THE ESTATE

After the executor has paid the estate’s taxes and distributed all assets to beneficiaries, the estate can be closed. Typically, this involves filing any outstanding tax returns and, depending on the state, presenting a report to the court. The report should include the estate’s final balance sheet, a record of tax and debt payments, and receipts from beneficiaries. Additionally, the executor may need to request a formal release from their duties, signifying that the estate is settled and that the executor has no future liability.

DON’T GO IT ALONE

“Even a modest estate requires proper financial and legal safeguards. Executors, no matter how capable, may encounter challenges with their responsibilities. Additionally, beneficiaries who are grieving deserve the time and space to cope with their emotions and take on the task of preserving a legacy.

Allow the experienced professionals at Haven Financial Planning to help alleviate some of the legal and financial responsibilities associated with settling an estate, allowing you and your loved ones to concentrate on what is truly important.”

When you find yourself in the challenging position of being the executor of an estate, it can be overwhelming to navigate everything on your own. That’s why I strongly recommend considering the support of a probate expert. Here are a few heartfelt reasons why working with an investment advisor who specializes in probate can provide the guidance and assistance you need:

CONSOLIDATING ASSETS

I understand that managing the financial assets of the estate can be daunting, especially if you’re new to the role. A probate expert can walk you through the process of consolidating assets, filing necessary paperwork, and ensuring that everything is properly accounted for.

MAXIMIZING ASSETS

Maximizing the value of the estate is essential, especially when considering the costs involved in the probate process. A probate expert can help you develop an investment strategy that diversifies assets, maximizes returns, and adheres to legal guidelines.

MINIMIZING TAXES

Estate administration involves various taxes, which can add to the complexity of the process. A probate expert can offer valuable insights into minimizing taxes on investments, retirement accounts, and the entire estate through careful planning and strategic asset transfers.

PROVIDING EXPERT GUIDANCE FOR BETTER DECISIONS

As the executor, it’s normal to feel the weight of responsibility on your shoulders. Working with a probate expert can alleviate some of that stress by offering guidance on re-titling investments, making informed decisions on securities, and ensuring compliance with fiduciary obligations.

An Advisor can help you:

• Retitle investments at various transfer agents, brokerage firms, and investment companies
• Determine which decisions related to securities need to be made now and which ones can wait
• Maintain compliance and fulfill your fiduciary obligations by overseeing the assets
• Open investment accounts to transfer assets to beneficiaries
• Consolidate asset accounts and reinvest
• Avoid costly mistakes and tax penalties

If you’re feeling overwhelmed by the responsibilities of managing an estate, please know that you don’t have to go through it alone. Consider reaching out to a probate expert who can provide the compassionate support and expert guidance you need during this challenging time.