The 5-Point Survival Guide For Executors And Trustees Of Estates

Estimated read time 5 min read

If you’re not a spy in the underworld or the villain of a horror film, you may not feel the need for a surprise when your will is read. In a movie, the sudden announcement of a trustee or executor can be a great drama. But in real life, it’s not funny. It’s painful.

Make your own death as easy as possible. First things first: Be sure to inform your executor/trustee that they are in charge and what their duties will be. This information should never be a surprise. It is bad estate planning to leave your friends in these positions and then let them know at the funeral.

Executors are the representatives of the deceased. They are authorized to administer and distribute an estate. The executor must be familiar with the terms of the estate and the beneficiaries.

A trustee oversees a trust. The first step in establishing a trust is to identify which assets belong to it and which do not. Trusts are generally used to avoid probate, and to give more control and direction over certain aspects. The trust will own the assets that the person who created it specified if it is properly funded. The trustee is a person or group who decides how to use the funds of the trust.

The primary difference between executors (executive) and trustees (trustees) is their function. Executors liquidate the estate, while trustees are in charge of managing it. The first is often very temporary while the trustee may serve for many years. Both jobs are not usually compensated. People would make money if there was money to be had. It is still important to follow the instructions if asked. Here’s a quick guide to survival.

What Estate Trustees and Executors Need to Know

1. RTFM.

You should read all the documents before you make any decisions. All the important questions will be answered. Here you will find instructions on the management and distribution, as well funerals and burials.

There will hopefully be a personal property memorandum for valuable items such as jewelry, art, or weapons.

2. Calculate the assets.

It can be difficult to find the complete list if they haven’t.

You need to find the heirs after you have gathered all the information you can about the deceased, including bank accounts, retirement plans and insurance policies. The heirs of the deceased are usually relatives or at least present at the funeral.

It can be a bit hairy. What happens if, for instance, one of the heirs is deceased? It is easy to overlook this kind of detail. You will be forced to make a decision that will surely cause the family to resent you and ruin Thanksgiving forever.

3. Pay up.

We rarely leave this earth owing nothing. You will most likely have to pay some creditors on behalf of the dead. You must ensure that all creditors are paid out of the estate. If you fail to comply, it could result in liability. You don’t need to worry about these problems. This is a thankless task.

In general, secured creditors like mortgage lenders are paid when the property is sold unless the estate has cash on hand and intends to keep the assets.

Notify the secured creditors immediately of the death. If possible, make payments as soon as possible to avoid penalties.

Negotiate with creditors who are unsecured. The credit card companies do not expect to receive full payment. You can lower the prices. Remember that the creditors have legal recourse, but will incur significant legal costs in probate court in order to collect the debt. They can be bought off at a third of the amount owed.

As executor, you’ll need to inform your creditors of the probate action, if there is no will. It is only going to make your executor resentful.

Unsecured creditors must make a claim on the estate in a specified time period. Many unsecured creditors will not make a claim after being notified of the estate’s assets.

Hold off on paying unsecured creditors unless claims are made, rather than just paying them in full when you feel like it. It’s possible that problems of this kind will simply dissolve into the banking bureaucracy.

The estate documents will outline the steps involved in estate administration.

If the identity of any heirs is in question, you may need approval from the court before you distribute proceeds. You may need court approval if the identity of any heirs in the estate is in doubt.

This simple fact is vital to the administration: You should not interpret anything confusing, ambiguous or contradictory. If you want to prevent claims against your estate or yourself, get court approval before interpreting a will.

5. Taxes are due.

You will be responsible for the estate and individual income tax returns as your last duty as an executor or trustee. Be sure to mark the tax returns “DECEASED” or else they could literally come back and haunt you. If the estate has received more than $600 of income, you must file an Estate Return.

Easy, Overachiever!

It is a difficult job to be an executor, trustee or administrator. If you need help, get it. The estate will pay for the fees of accountants and lawyers to ease your stress. You should be reimbursed for your out-of pocket expenses.

Remember that this is an emotional time for the family. You are likely close to the family if you act as an executor or trustee. You can offer emotional support and financial expertise. Be sure to execute your legal duties with a level-headed approach and not with a bleeding soul.

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