The position of “executor” is one of enormous trust and confidence – you have been entrusted to transfer the things we care about to the people we love according to a strict set of guidelines written down in a document called a Last Will.
The death of a loved one generates powerful emotions and complicated family dynamics. While we expect grief and sadness, families are often surprised by the jumble of other emotions when working with family members – whether it be dealing with long-standing inter-generational conflicts or the more complex issues around unwelcome in-law involvement.
It can be a daunting task, both in terms of the duties of the executor, time and skills required, but also in terms of family conflict. We urge diplomacy and patience where possible. To help with this often foreign process, we have put together a brief overview of the tasks to come. Since each estate is unique, the following is for general guidance only.
Table of Contents
A copy of this executor checklist is at the bottom of the page.
Securing Decedent’s Assets
What you need to do first:
- Change locks on the home, put valuables in a secure location.
- Notify credit card companies of the circumstances and stop future charges from being incurred. However, be mindful of certain automatic payments that may be appropriate/necessary to continue (consider payments on homeowners’ and vehicle insurance policies, mortgage payments, utilities).
- If a spouse is surviving, do not allow health, disability, long-term care, life and other insurance policies to lapse.
Initiating Probate of the Will
- Obtain original death certificates and gather testamentary documents: usually, the Last Will and may include a Revocable Trust.
- Seek the advise of a lawyer who specializes in the area of trusts and estates and probate.
- Apply to the appropriate Court (typically a Surrogate’s Court) to have the Will “probated” (or proved) to the satisfaction of the Court and over the objections, if any, of the parties interested in the estate.
Give notice to all beneficiaries – both those named in the Will and those who would have inherited if decedent left no will Depending on the State, notice can precede or follow the probate of the Will.
Marshaling the Assets
- Obtain a tax identification number for the estate.
- Open one or more estate bank and investment accounts into which all liquid estate assets can be funneled.
- Gather information for all assets (bank accounts, brokerage accounts, etc.). For many assets this means changing title from the decedent’s name to the name of the Estate so that the assets are brought under the legal control of the Executor.
- Determine the validity of and pay (from decedent’s assets) any claims or liabilities unpaid at death, including unreimbursed medical expenses, unpaid income taxes, credit card obligations, mortgages, etc. The Executor also is responsible for paying the funeral costs (or reimbursing a payer of funeral costs).
Prepare and File Tax Returns
- Determine whether decedent’s estate is subject to State and Federal death taxes, also known as estate and inheritance taxes (seek the advice of a lawyer who specializes in estate matters, and if tax returns are required to be filed, assist professionals in preparing for that filing.
- There are also income taxes, which are separate from estate taxes. Consult with counsel about the requirements for each in the State where decedent lived or owned real property.
- If appropriate, the Executor is required to file the Federal Estate Tax Return (Form 706) with the IRS within nine months of date of death. The federal estate tax is in addition to income tax and ranges as high as 40%; various States, including New Jersey and New York have their own death taxes.
- As to income taxes, Executors are responsible for arranging for the preparation and filing of decedent’s final personal income tax return, as well as returns for income earned following decedent’s death.
Accounting and Close Out the Estate
- After all of the above is concluded, income and death tax returns have been filed and approved, the Executor must “account” to the beneficiaries for their financial activities showing a) what they started with (e.g. cash, the stock account, real estate, etc.), b) what additional monies came in (such as tax refunds, or interest and dividends and insurance reimbursements), c) what expenses and taxes you have paid or will be paid and finally d) reporting what is left.
- The executor must also propose the distributions he intends to make to the beneficiaries.
- Once the accounting is approved by the beneficiaries, Releases signed by them are filed with the Surrogate’s Court and the assets are distributed and the estate is concluded.
- Final distributions from the estate may take as long as 18 – 24 months from date of death (or more, in the case of tax audits or Will contests).
Contact the lawyers at Gartenberg Howard LLP at (201) 488-4644 or click the contact us button below to ask any questions about executor duties and related laws. We are here to help.