If you have been named the executor or successor trustee of an estate, it's essential to contact an Orange County estate planning attorney who can discuss your obligations and the responsibilities involved in this role. Many feel overwhelmed as they are grieving the loss of their loved one yet also faced with the responsibility of handling the administration of the estate.
Executors, also known as personal representatives in some cases, are faced with an extensive list of to-dos. Let's take a look at the steps to take when it's time to distribute someone's estate.
Ideally, this detail has been taken care of before the decedent's passing, and you have access to all the critical documents. If not, call their estate planning attorney in Orange County.
If they do not have an attorney, consider where they may have kept important documents. For example, if they had a safe deposit box, you would be allowed access to search for the will. If you cannot locate the will, the deceased is said to have died intestate and the state will determine asset distribution.
Once located, the executor needs to file the original with the probate courts, even if probate is not expected to occur. If the deceased had a revocable trust, the assets and property placed into the trust would not need to go through probate.
Probate can be a long, drawn-out, and financially depleting ordeal. If beneficiaries end up arguing about the distribution of the estate, you can expect rising fees and decreasing assets. Sadly, inheritance disputes bring out the worst in family members.
The executor needs to notify several companies, including utility and credit card companies, the post office, banks, and the Social Security Administration if the deceased was receiving benefits.
Executors also need to notify creditors. Depending on state laws, they can do this through the mail or publish a notice in the local paper or both. Creditors then must file any claims within a certain period.
After the will has been located, the executor needs to perform a thorough inventory of the assets in the estate. Assets of value, such as jewelry or antiques, will need to be appraised. It's not uncommon for family members to enter the home and remove valuable or sentimental items, making the process of inventory vital to fair distribution.
If items are removed and the person who took them refuses to return them, the court can demand their return. In addition, if an executor feels that some assets in the home are not secure, they have the legal ability to change the locks.
The executor is required to obtain a Federal Tax ID number and open up an estate bank account. The accounts of the deceased are then transferred into this account.
Before distributing assets, creditors, bills, fees associated with administering the estate, and funeral costs need to be paid. The Executor also needs to file the final tax return, determine if any state or federal estate tax is due, and pay any taxes. Once paid, a release from the tax agency is required by the probate court.
If there is not enough money to cover these expenses, an executor may need to sell stocks or other assets. Before doing so, contact an estate planning lawyer in Orange County.
Because of the extensive time factor and to give creditors time to come forward and request payment, the distribution of assets can occur many months after the decedent has passed on.
To determine if probate is necessary, an executor will need to figure out the value of the assets, if a trust is in effect and the type of trust. Because of the numerous rules and regulations regarding probate, it's essential to contact an Orange County estate planning lawyer to help you through this process. If any mistakes are made in the handling of the estate, an executor can be held liable.
In many cases, the successor trustee and the executor are the same person. However, if the deceased left a living trust and named a different person as successor trustee, the executor will need to work closely with this person who is in charge of trust assets.
Any assets that have been placed into the trust do not have to go through probate and can be distributed to the beneficiaries much sooner than property going through probate.
The executor is entrusted with the immense responsibility of preserving and managing the assets before they are distributed to the beneficiaries. This means that bills need to be paid, and investments and assets need to be secured.
Part of this process may be ensuring the home mortgage and utilities are paid as well as the insurance premiums of all valuables. Finally, the executor must also collect any money owed to the estate and deposit it in the estate's bank account.
Once bills and taxes are paid and the probate, if applicable, has closed, an executor can distribute the assets. If the beneficiaries are not satisfied with the distribution or suspect foul play by the executor, they can request an informal accounting by the executor or petition the court for mandatory accounting.
Should this occur, it's important to consult with an Orange County estate planning attorney as soon as possible.
As you can see, the person named executor holds tremendous responsibility. If you are in the process of developing an estate plan, be sure to choose this person wisely. Anything that is not in writing, such as personal and household items, will need to be distributed by the executor at their discretion.
For this reason, the person must be impartial and fair. The right person in this position can make the difference between a smooth transition and a family dispute that dwindles away the assets intended for loved ones. At Parker Law Offices, we ensure that our clients have the documents in place that protect your family and your assets and help executors accomplish their duties. For a complimentary consultation, contact us at Parker Law Offices today.