What Every Executor Should Know

The job of executor is difficult because he must perform tasks that are complex and unfamiliar at a time that can be emotionally trying. You can ease your executor’s burden by providing him with the information he will need to perform his duties.

 Assets

 The executor must gather and inventory all of your assets, pay your debts including taxes and costs of administration, distribute the remaining assets as you direct in your will and then account to the court for all he has done. He needs to report the date of death value for both probate and non-probate assets for the taxes.

 You should provide your executor with current information about the location and value of bank accounts, brokerage accounts, stocks, bonds, IRAs, collectibles, antiques, life insurance policies and annuities. You should also make him aware of the location of your will, stock certificates, deeds, auto titles and tax returns.  A list of your valuable jewelry, furnishings and personal items will also be helpful, especially if you are wanting to give specific bequests.

 Beneficiaries

 Your executor will need to contact your beneficiaries and next of kin and to report their names and addresses to the court so they can be properly notified. He will need the names and addresses of not only those who inherit by the will, but also those who would have inherited had there been no will.  You should also leave your executor the names and addresses of any one who receives property outside of probate, such as by a joint or payable on death account or as the beneficiary of an annuity, life insurance policy or IRA.  These items must be reported on your estate tax return.

 Contacts

 Make your executor aware of people who can help him with the estate. Provide him with the names and phone numbers of your attorney, accountant, broker, financial advisor, banker and insurance agent.  They will be able to provide both assistance with the estate and historical information.

 The law directs the steps the executor must take in administering the estate and the time in which each step takes place. The executor is responsible to the court for following through.

 Documents

 Initially, the executor files an application to probate the will and an application to administer the estate. He will also file a listing of those who would inherit with and without the will and are, thus, entitled to notice of the proceedings.  He must then serve a notice on these people by certified mail or present a waiver of notice which they have signed. If he does not know all the heirs or their addresses, he must publish a notice in the newspaper.

 The executor must present proof of service or the waivers to the court and certify that everyone who was entitled to notice received notice. The filing of the certificate begins the three month period during which the will can be contested.

 Once the executor has filed his application with the court, he receives his official Letters of Authority which allow him to begin managing the estate assets. He will need to order a tax identification number from the IRS.  He may petition the court to appoint an appraiser to value real and possibly personal property.  Once he has ascertained the value of the assets he will file an inventory with the court.  He will gather together all the assets and place them in an account under his name as executor.  He can then proceed to pay the debts and expenses of the estate and sell or transfer the real and personal property.

 Estate Tax

 There are three or four taxes the executor must concern himself with. He must file the decedent’s final 1040 income tax in April of the year following the death.  He must also file a form 1041 for income received by the estate after death.  This is filed at the end of the estate’s tax year.  He must file an Ohio Estate Tax return and pay tax on amounts over $338,000 (if death is prior to December 31, 2012).  This is due nine (9) months from the date of death.  If your gross estate exceeds the federal limit, he must also file a Federal Gift and Estate Tax.  This tax is also due nine (9) months from the date of death.

 Finalizing the Estate

 Creditors have six months from the date of death to file their claims, but most bills are paid much sooner. If the beneficiaries are willing to accept responsibility for any remaining bills the estate can be closed early.  The executor must file an account with the court six months from the date the estate is opened.  This accounting shows all income and expenses of the estate.  At this time, applications for attorney fees and fees for the executor are presented to the court.  When all is distributed and approved, the estate can be closed.

 Handling your estate can be a complicated and difficult process for your executor. You will make his job infinitely easier by providing as much information and instruction as possible as to how you want your estate to be managed.

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