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Thursday October 22, 2020

Savvy Living

Savvy Senior

An Executor's Guide to Settling A Loved One's Estate

My aunt recently asked me to be the executor of her will when she passes away. I am flattered that she asked, but I am not sure what exactly the job entails. What can you tell me about this?

Serving as the executor of your aunt's estate may seem like an honor, but it can also be quite a bit of work. Here is what you should know to help you prepare for this job.

As the executor of your aunt's will, you will essentially be responsible for winding up her affairs after she dies. While this may sound simple enough, you need to be aware that the job can be time consuming and difficult depending on the complexity of her financial and family situation. Some of the duties required include:
  • Filing court papers to start the probate process (this is generally required by law to determine the will's validity).
  • Taking an inventory of everything in her estate.
  • Using her estate's funds to pay bills, including taxes, funeral costs, etc.
  • Handling details like terminating her credit cards and notifying banks and government agencies, such as Social Security and the post office of her death.
  • Preparing and filing her final income tax returns.
  • Distributing assets to the beneficiaries named in her will.
Be aware that each state has specific laws and timetables on an executor's responsibilities. Your state or local bar association may have an online law library that details the rules and requirements. The American Bar Association website also offers guidance on how to settle an estate. Go to AmericanBar.org and type in "guidelines for individual executors and trustees" in the search bar to find it.

Get Organized


If you agree to take on the responsibility as executor of your aunt's estate, your first steps are to make sure she has an updated will and find out where she keeps all her important documents and financial information. Being able to quickly locate deeds, brokerage statements and insurance policies after she passes away will save you a lot of time and hassle. These are great conversations and questions to ask your aunt.

If she has a complex estate, you may want to hire an attorney or tax accountant to guide you through the process. The costs to hire an attorney or tax accountant may be paid from your aunt's estate. If you need help locating a professional, the National Association of Estate Planners and Councils (naepc.org) and the National Academy of Elder Law Attorneys (naela.org) are good resources that provide directories on their websites to help you hire someone.

Avoid Conflicts


Find out if there are any conflicts between the beneficiaries of your aunt's estate. If there are some potential problems, your job as executor can be much easier if everyone knows in advance who is getting what, and why. It may be a good idea to ask your aunt to tell her beneficiaries what they can expect from her estate. This includes personal items because wills often leave it up to the executor to distribute heirlooms. If there is no distribution plan for personal property, suggest she draft one.

Executor Fees


As the executor, you are entitled to a fee paid from the estate. In most states, executors are entitled to take a percentage of the estate's value, which often ranges anywhere from 1 to 5% depending on the size of the estate. However, if you are also a beneficiary, it may make sense for you to forgo the fee. Executor fees are taxable, but most states do not tax income from an inheritance.

Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.

Published August 28, 2020
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