Every estate is different, and every estate settlement has its own nuances. If you have been named executor of an estate, there are certain procedures you must follow. Here’s a checklist that will help you determine which steps to take:
1. Determine if probate is necessary.
Whether probate (https://en.wikipedia.org/wiki/Probate) is necessary often depends upon the size of the estate after all the non-probated assets (anything that can be transferred outside of probate) are removed. Even if probate is required, many states have streamlined procedures for small estates.
Probate isn’t necessary for many common assets. No probate is necessary to:
- Pass real estate and other assets owned in joint tenancy to the surviving joint tenant
- Transfer bank accounts and securities registered in “payable on death” form to beneficiaries
- Transfer funds in IRAs and retirement plans to named beneficiaries
- Transfer property left to the surviving spouse (in some states), or
- Transfer assets held in trusts (such as living trusts or AB marital bypass trusts) to named beneficiaries.
2. Decide if you need a lawyer.
Hiring a lawyer may be a good choice, especially for estates with lots of different types of property, significant tax liabilities, or the potential for disputes among inheritors. However, many executors can handle their duties without a lawyer, especially if the executor is the main beneficiary and doesn’t expect any complications.
There are two ways to work with a lawyer:
- Hire a lawyer to act as a “coach,” answering your legal questions as they come up. You might also want the lawyer to do some research for you or look over documents before you file them.
- Hire a lawyer to do everything. The lawyer will be paid out of the estate. In most states, lawyers either charge a lump sum or charge by the hour.
3. Get non-lawyer help.
Here are some ways to get help if you decide against hiring a lawyer:
- Probate court clerks commonly answer basic questions about court procedure but won’t provide legal advice particular to your case.
- In some courts, staff lawyers will look over probate documents; they may point out errors in your papers and tell you how to fix them.
- Consult books written for non-lawyers. The Executor’s Guide: Settling a Loved One’s Estate or Trust, by Mary Randolph (Nolo), leads you through the probate process, step by step.
4. File the will and notify beneficiaries.
File the will in the local probate court and ask the court to confirm you as personal representative. Send notice of the probate proceeding to the beneficiaries named in the will and if necessary, to certain close relatives — in most cases, a surviving spouse and children — who would have been entitled to property had there been no valid will.
5. Locate and manage assets.
Locate and secure the deceased person’s assets and sensibly manage them during the probate process, which commonly takes about a year. Depending on the contents of the will and the financial condition of the estate, this may involve deciding whether to sell real estate or securities owned by the deceased person.
6. Handle day-to-day details.
Handle day-to-day details, such as terminating leases and other outstanding contracts, and notifying banks and government agencies — for example, the Social Security Administration, the post office, Medicare, and the Department of Veterans Affairs — of the death.
7. Establish an estate bank account.
Set up an estate bank account to hold money that is owed to the deceased person — for example, paychecks and stock dividends.
8. Pay expenses and taxes.
Pay continuing expenses — for example, mortgage payments, utility bills, and homeowner’s insurance premiums. The executor must also pay income taxes and file an income tax return for the year in which the person died.
If necessary, the executor must pay estate taxes. It’s unlikely, but state and federal estate tax returns may be required. (For more information, see Nolo’s Estate Tax Resource Center.)
9. Pay debts and notify creditors.
Pay any debts that the estate is legally required to pay. Notify creditors of the probate proceeding; the required method of notice will be set out by state law. They then have a certain amount of time — usually four to six months — to file a claim for payment of any bills or other obligations you haven’t voluntarily paid. As executor, you decide whether or not a claim is valid.
10. Distribute property.
Supervise the distribution of property — such as cash, personal belongings, and real estate — to the people or organizations named in the will.
11. Close the estate.
When debts and taxes have been paid and all the property distributed to the beneficiaries, ask the probate court to formally close the estate.
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The law office of elder law attorney Scott C. Painter, P.C., is located in Wyomissing (outside of Reading, PA, in Berks County,) and offers trusted legal services in the areas of elder law, including nursing home planning, trust and estate services, and veterans benefits. Scott C. Painter is a Certified Elder Law Attorney (CELA®), and he is also a member of the National Association of Elder Law Attorneys (NAELA).
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