While sitting down to write this post, a TV commercial flashed across my television screen. The ad featured a prominent and currently active pro quarterback and his wife in their late 30’s. They were promoting, of all things, the benefits of an on-line tool to develop an estate and trust plan. In the ad, they discuss the need to “have the hard conversation” with family to draft your will. They also tout the advantages of developing that plan using a commercially available software program.
It’s fantastic to see celebrities – especially young ones – communicate the need to have an estate plan in place. After all, each of us is familiar with the expression: there are only two things assured in life – death and taxes. Everyone complains about the latter. We need to proactively deal with the former. Having an estate plan is just the first step. Identifying your executor is a significant stage in that plan. Building a network of trusted advisors to ensure your executor’s success is yet another. The challenge comes in coordinating all those moving pieces and partners. Hours spent on the phone – on hold. Phone and email tag. Playing the scavenger hunt associated with passwords, deeds, accounts, paper and then organizing it all. Many executors need help.
Think of hundreds (or, in extreme cases, thousands) of hours coordinating the activities of attorneys, CPAs, financial advisors, realtors, funeral homes, churches, state and local government, de-clutters, movers….the list is endless. Much of that time has to be done during regular business hours. Does your executor have the available time to carve out an additional 8-10 hours a week to coordinate all these moving pieces? That’s time away from jobs, families, and managing their life.
Being an executor requires a combination of legal knowledge, financial acumen, organizational abilities, and interpersonal skills, plus more than a pinch of patience. The mix of these attributes can make the role of being an executor incredibly challenging.
When you’re meeting with your attorney to draft your will, ensure that you’re selecting an executor that possesses the above qualities. If you’ve already been appointed as an executor, here are some helpful tips to ensure smoother sailing.
- Navigating the Probate Process: An executor must often deal with the complexities of probate, which can be time-consuming and legally intricate. This includes filing the will with the probate court, attending court proceedings, and obtaining legal authority through documents like Letters Testamentary to act as the estate’s representative. The process can be especially challenging if the will is contested or if there are complex assets involved.
In many cases, an estate attorney will perform these tasks on the executor’s behalf. However, too many executors think that their role is simply about completing that process. They’d be wrong. Would you believe that there can easily be more than 100 separate tasks related to the executor’s duties?
- Asset/Liability Identification and Management: Both executors and trustees are responsible for identifying all assets and liabilities of the estate or trust accurately. This involves locating bank accounts, investments, properties, and even digital assets (think passwords and computer files), which can be complicated if the deceased did not leave clear records. Trustees might also have to manage these assets over an extended period, ensuring they are invested prudently to comply with fiduciary duty rules.
One way to get ahead of this is to start identifying assets when you’re named as executor. If that’s not possible or you’re already assumed responsibility, determine where and how all that information will be logged, stored, and maintained. A fire-proof filing box (clearly labeled) or cloud storage system are options to consider.
- Handling Debts and Taxes: Related to liabilities, executors must settle all legitimate debts of the deceased before distributing assets to beneficiaries. This includes notifying creditors, handling claims against the estate, and paying income taxes – both personal and estate taxes. Trustees also need to manage tax compliance for the trust, which might include filing tax returns for income earned by the trust. This can be particularly challenging if there are significant debts or if tax laws are complex. It’s advisable to engage a CPA to help ensure compliance.
- Distributing Assets: This task involves not just physical distribution but also interpreting the will or trust documents correctly. Both executors and trustees must ensure that assets are distributed according to the legal instructions, which can become contentious if there are ambiguities or if beneficiaries disagree with the interpretation. For trustees, this might involve managing ongoing distributions or discretionary payments which require balancing the needs of current and future beneficiaries. As with the identification of assets, it’s so much easier to begin this shortly after you’ve been named executor. An annual meeting with the estate attorney, financial advisor, and/or CPA is highly recommended.
- Dealing with Emotional and Family Dynamics: Among the most exhausting responsibilities is that executors and trustees often find themselves in the middle of family disputes or dealing with grieving beneficiaries. Balancing these emotional aspects with the legal and financial responsibilities can be extremely challenging. This includes dealing with expectations, potential conflicts of interest, and sometimes having to make tough decisions that not all beneficiaries might agree with. The role can be emotionally taxing, particularly when it involves close family members or friends.
These are just a few steps. There could be more than 100 that you’ll need to address. By answering a few simple questions, we can help you identify the size of the estate.
Westwood Solutions was created from my personal experience as an executor. Whether you’re an #executor, #estate attorney, #financial advisor, #CPA, #appraiser, #realtor, #organizer, #socialworker, #familyoffice, or are involved in another capacity of estate and trust management, Westwood Solutions can help navigate the duties of estate management. We can provide guidance, discounts on estate tools, coordinate the activity with you, or do as much of the work as you’d like us to take on. If you’re an executor, let us simplify your life and help you give you peace of mind.
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