"Protecting The Assets of Seniors and Their Families For Thirty Years"
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If you are about to appoint someone as your Executor under your
will or if you agree to accept an appointment as an Executor under someone
else’s will, you should know what the duties and responsibilities of an Executor
are.
Being an Executor involves many duties, responsibilities and
liabilities.
I handle the probate and administration of estates and advise
Executors as to their duties, responsibilities and liabilities on a regular
basis.
I hope you find this 94 Point Checklist informative in giving
you an idea of what is involved in being an Executor, whether you are deciding
who will be your Executor or if you will be someone else’s.
Dick
ESTATE CHECKLIST
I. Actions
to Be Taken Immediately
1. Review all files:
2. Consider flowers, contributions, or letters of sympathy.
3. If decedent has no close or surviving family, consider
anatomical be 4. Is there casualty insurance? It may require action before the
interment.
5. Make security arrangements, if appropriate, if decedent's
residence will be unoccupied (permanently or during the funeral).
6. Complete obituary.
7. Inform all advisors of death by telephone:
e.g.,Trustees; Investment; Tax; Personal Banking; Real Estate;
Insurance; Lawyer, Accountant, Financial Planner.
8. Make arrangements to have all mail rerouted to you, e.g., bank
account statements, financial statements, loan notices, insurance premiums, tax
bills, utility bills, etc.
9. Determine what lawyer will advise you and handle the probate of
the will and the administration of the
estate. 11. Discuss Probate of the Will. Probate papers should be prepared by
the attorney and signed by you. Petition for appointment as trustee of
testamentary trusts at the same time.
Consider: B.
Necessity for Ancillary Administration if decedent owned assets (generally other
than intangibles or joint property with right of survivorship) in another state.
A. Closely
held business interests, or unusual
assets. 20. Keep track of any changes in account holdings, cash receipts and
disbursements subsequent to date of death in estate
account. IV.
First Meeting with the Family. 26. Determine if jewelry and other fine arts and transportable
valuables should be placed in a safe or otherwise secured.
27. Discuss with family, attorney and accountant:
A. Which of decedent's employees (if any) are to be retained.
Discuss B.
The length of time during which the estate can pay bills for the management and
preservation of real and personal property pending distribution to
beneficiaries.
C.
Arrange for the payment of salaries during this period.
D.
Discuss with accountant the necessity for setting up withholding, filing tax
returns, etc.
28. Ascertain whether decedent held any:
A.
Outside fiduciary or beneficiary
relationships. 29. Request social security numbers and income tax brackets of
beneficiaries.
30. Give this information to the accountant for use in preparation of
estate income tax plan.
31. Ascertain if any beneficiary has a pressing need for income or
strong wish to defer taxable income.
32. Are there unusual circumstances warranting early estate
distributions and/or preparation of estate income tax plan?
33. Arrange with spouse or relatives of decedent to have decedent's
mail sorted and forwarded to you. If decedent lived alone, request that the Post
Office forward decedent's mail directly to you. It is necessary to
enclose a probate certificate with the formal request to the Post
Office. 34. Review all insurance policies. Promptly ascertain need for new or
additional coverage.
35. Prepare Real Estate Checklist. Provide supplemental back-ground
information and instructions as necessary to the Attorney. Include a
determination if there are any gas tanks or other environmental problems.
Discuss renunciation of real estate with estate attorney and beneficiaries.
36. Arrange for appraisals of both personal and real property.
A.
Discuss the selection of an appraiser with the attorney beforehand.
B.
Try to coordinate the real estate appraisal date with personal property
appraisal to avoid inconveniencing surviving spouse or who ever is living in the
house and to save expenses.
C.
If valuables have been transferred to a safe, consider arranging an additional
appraisal where the safe is.
D.
Also consider appraisal at safe deposit box.
37. Verify that appraisals do not omit any property to be valued in
the estate. Verify that all items on appraisal are accounted for when sold or
distributed.
38. If necessary, secure car and house keys and change house locks:
Consider arrangements to have guard on premises pending adequate insurance and
security protection.
VI. Additional Actions to Be Taken
39. Prepare cash requirements. Discuss legal fees with attorneys
beforehand
40. Compile necessary data to begin estate inventory.
41. After Probate, An Information Notice (advising decedent’s account
and financial advisors) should be circulated. It should contain the following
information: the date the Will was admitted to probate, date of Letters
Testamentary (if issued) (distinguish preliminary/permanent Letters); court file
number if any; the County court where the will was probated and if warranted,
comment on the necessity of ancillary administration and details.
42. Arrange safe deposit box opening: Prepare a letter of
introduction for yourself at the box opening. Bring Death and Probate
Certificates, box key, and securities case (if necessary). Determine if family
members wish to attend opening. If a co-executor will not be attending the box
opening, obtain a waiver of his/her presence. Consider necessity for a
guard.
43. Determine legal requirements for release of assets from outside
custodians, and re-registration of decedent's securities into estate account.
Discuss with estate attorneys the need for tax waivers, releases of lien, and
foreign tax returns, etc. Determine whether securities are incorporated outside
of decedent's state of domicile. Non-resident tax waivers may be required. If
warranted, consider sales (before re-registration into estate’s account) with
legal requirements attached, or for delayed settlement. Discuss with investment
officer. Also, consider Securities Law compliance and discuss the same with
estate attorney, financial advisor and accountant to determine compliance
requirements, if any.
44. If the estate involves charitable remaindermen, file a New York
State Charitable Report.
45. Compose comprehensive draft of estate road map letter which
should be reviewed by estate attorney for their comments before sending to
beneficiaries.
46. Consider new business and business retention possibilities.
Prepare report covering results of New Business inquiries.
48. Ascertain if decedent had foreign property interests. Review the
laws of the foreign jurisdiction to determine procedures for administration, tax
computations and tax liability. Any tax liability will be part of cash
requirements. Determine necessity for ancillary administration.
49. Ascertain whether decedent ever lived in a community property
state where property at death may be considered community property.
50. Review any questionable claims or charitable pledges before
payment.
51. Consider qualified disclaimers within nine months of death (Code
Sec. 2518). Make necessary calculations to determine any tax savings. Review
local law re disclaimers to ascertain that Federal requirements are satisfied.
Consider surviving spouse elective share provisions in view of Will
provisions.
52. Consider the advisability of a co-executor waiving commissions.
If co-executor is surviving spouse, consider the cost of taking commissions in
respect to impact on marital deduction and size of residuary share. Compare
estate tax rate and income tax rate of beneficiary.
53. Review possibility of generation-skipping transfers (I.R.C. CH.
13, Sections 2601-2622).
VII. Post-Mortem Income Tax Planning.
55. Post-mortem income tax plan should be prepared as soon as
possible but no later than six months after the dale of death. Consider the
implications of deciding whether to charge administration expenses on the
Federal estate tax return or the fiduciary income tax return.
56. The Decedent 's Final Income Tax Return:
A.
Consider extension of filing, filing jointly, amending returns, or other
elections, e.g., medical expenses, Series E Bonds, etc.
B.
Consider time limitations on outstanding income tax return claims and pending
deficiency or refund suits.
C.
Arrange filing of final income tax return and payment of
tax. 58. Annually review income tax plan in light of possible changed
circumstances with estate attorney and accountant. Send annual tax plan with
letter of explanation to beneficiaries.
VIII. Gift Taxes. 60. Effect of Gift Taxes on Federal Estate Tax Return:
A.
All gift taxes paid after December 31, 1976 and within three years of the
decedent's death must be included on Schedule G of the 706 and should
be taken into account in making cash requirements calculations.
B.
All gift taxes paid after December 31, 1976 are credits to estate tax on the 706
and should be shown on the cash requirements.
61. Consider settling outstanding gift tax liability prior to the
filing of 706. Review last three years' cancelled checks to verify
decedent's reporting of taxable gifts. Consider asking for prompt
assessment under IRC 6501.
62. Consider whether a gift tax return should he filed for gifts made
in year of death.
64. Complete forms (for veterans, survivors benefits, burial
allowance, lump sun) death benefits, etc., as the case may be) for claiming
benefits due estate or family members.
65. Collect bank and brokerage accounts as soon as possible. Banks
may have different legal requirements for remitting balances to executors.
Generally passbooks, tax waivers, probate certificate and death certificate are
required.
66. Cancel credit cards. Inquire whether decedent's staff is in
possession of credit cards. Obtain and destroy all credit cards. Before settling
accounts, inquire whether there is credit card life insurance in effect.
Consider surviving spouse's wishes to have new credit cards issued in
surviving spouse’s name.
67. Cancel club memberships and collect any unearned portion of dues.
Consider wishes of surviving spouse and/or other family members to continue or
transfer club memberships.
68. Cancel magazine subscriptions and obtain refund on unexpired
portion of subscription.
69. Redeem Traveler's checks. Send memo with checks, death
certificate, probate certificate to tellers for redemption. Follow-up in two
weeks.
70. Review preliminary date of death inventory. Consider making
additions as decedent's outside assets are collected or appraised, and updating
inventory as assets are sold or distributed.
71. Obtain alternate values. Have securities or assets, not sold or
distributed, revalued to determine if alternate valuation date should be used.
For estate tax purposes.
72. Make sure accountant transfers accrued income per estate
inventory, net of expenses, to principal of estate account.
73. Determine due date for payment of legacies under applicable State
law and review with attorney. Consider early payment of legacies with residuary
beneficiary, attorney and accountant.
74. Request beneficiary's social security number and delivery
instructions for payment of legacies one month before payment is to be
made.
75. Arrange for estate attorney to send Receipt and Release
Agreements to beneficiaries for signing one month before payments are to be
made. Generally obtain signed Receipt, Release and Refunding Agreements before
making legacy payments or distributing assets
76. Pay legacies. Consider paying cash legacies in kind.
77. Distribute specific bequests of tangible personal property. If
appropriate supervise any selection process called for.
79. Consider obtaining Federal Release of Lien for personal property.
Also consider requesting discharge, under IRC 2204, for estate tax, IRC 6905 for
gift tax and income tax.
80. Change statement frequency to quarterly.
81. Consider extension of time for payment of tax pursuant to I.R.C.
Sec. 6161 (on reasonable cause), Sec. 6163 (on value of reversionary or
remainder interest in property), or Sec. 6166 (on closely held business and/or
farm property). Note: Extension of time for payment of tax is not an extension
for filing return.
82. Consider extension of time for filing 706 for as long as six
months. (I.R.C. Sec. 6081) Note: tax must be paid on time. General policy is to
avoid asking for an extension to file unless compelling circumstances require
it.
83. Send completed inventory to attorney/accountant and beneficiaries
no later than one month subsequent to alternate valuation date so that federal
estate tax return can be prepared and reviewed no later than three weeks before
due date of tax. Consider asking attorneys or accountant to send copies of draft
of 706 to you for your review.
84. State Estate/Inheritance Tax
A.
Determine the due
date. 85. Redeem United States of America Treasury Bonds with appropriate
form(s) for assets held in trust, jointly owned, etc. Send to attorney with
accrued interest calculations for review at least four weeks prior to due date
of tax.
86. When you receive official confirmation of income accrued on
Flower Bonds used to pay tax (if there is no contrary provision in the Will or
local law) reimburse estate income from principal in this amount.
87. Consider with attorney the type of estate settlement desired:
Judicial Accounting; Receipt, Release and Refunding Agreement with formal
schedules.
88. Advise beneficiaries of accounting commencement.
89. Consider the desirability of an intermediate accounting if final
account is expected to be complex.
90. Review post-mortem income tax plan. Determine the desirability of
a prompt or a deferred closing of the estate.
91. Verify that attorneys have filed the New York Surrogate's Court
Report within required period after probate. 94. Will sufficient income be collected in final year to absorb
administration expenses taken on fiduciary income tax return, or will the
deduction pass through to beneficiaries who can use it?
95. Ascertain if a reserve of income of continuing trusts should be
maintained to cover income tax .
96. Send letter to beneficiaries of continuing trusts advising them
of the end of your involvement and introducing (if necessary) the Trustees of
the Trust.
CHECKLIST FOR:
DUTIES AND RESPONSIBILITIES OF AN
EXECUTOR
A. That the decedent had
with:
a. his
lawyer,
b. his
accountant,
c.
financial planner
B. That decedent had in his
possession
for:
a.
personal and family history,
b. fiduciary and
beneficiary relationships.
II. Initial Contact with Attorney.
10. Agree on
delegation of duties. Discuss fees and choice of appraiser(s).
A.
Advisability of Preliminary Letters Testamentary which are appropriate if undue
delay in obtaining permanent letters is expected and the estate has an immediate
need for cash, or if estate assets are subject to great fluctuations in
value.
12. Request that attorney petition Surrogates Court for
safety deposit box opening.
13. Discuss:
B.
Pending litigation concerning the decedent.
14. Make
sure attorney has original will.
III. Actions To Be
Taken Within First Month of Adminitration
15.
Order valuations for Federal estate tax purposes.
16.
Prepare Will Analysis summarizing Will provisions in concise
form.
17. Obtain an estate Employer Identification
Number from the Internal Revenue Office by filing an SS4 form. Also file a
Notice of Fiduciary Form with the Internal Revenue Service and New York State to
get all correspondence from the IRS and New York State Department of Taxation.
18. Open an estate checking account after the will has
been probated.
19. After Probate, transfer securities
from decedent’s account into an estate account.
21. Confirm that all cash and security
transfers have been completed. Close all of decedent’s personal
accounts.
22. Obtain financial and bank statements of
all transactions for all accounts covering the three-year period before the
decedent's death for review re: estate, gift tax returns and income tax returns.
Consider sending copies of these statements to
attorney/accountant.
23. Maintain a folder for a record
of all disbursements for estate expenses, e.g., travel, long distance telephone
charges, etc., to be charged to estate as reimbursement to Executor.
24. Review family
background and prepare agenda. Obtain input from attorney, accountant, financial
planner and co-executor if there is one.
25.
Obtain:
A.
B.
Income, gift tax returns for three calendar
years.
C.
Insurance policies and
appraisals.
D.
Salary records for employees, if any.
E.
Medicare
information.
F.
Closely held business records, if
any.
G.
Credit
cards.
H.
Securities, traveler's checks, cash, etc.
termination and severance pay. (Consider estate tax
ramifications.)
B.
Powers of
Attorney.
C.
Property taxed in other estates within 10 years of death.
D. Powers of Appointment.
E. Consider if the decedent could be a deemed transferor for
generation-skipping purposes.
V. Administration of Real Property and Tangible
Assets
VI. Issues for Consideration with Family, Attorney, Accountant.
47. Review powers of appointment to determine taxability. Obtain
required information on powers of appointment at initial meeting. Have attorney
confirm all conclusions in writing.
54. As soon as possible but
no later than three months after date of death, check with lawyer and accountant
to ensure that they have all necessary information for tax plan.
57. Consider asking for prompt assessment under IRC
6501.
59. Review decedent's gift tax
returns for all gifts made in the three years preceding death. Obtain copies of
all returns for 706 preparation.
IX. Finalize Estate Inventory.
63. Review income tax returns for
potential assets.
X. Payment of Legacies
XI. Estate and Inheritance Taxes.
78. Prepare letter to same individuals who received roadmap
letter. Explain filing procedure, payment of tax. Inform them that monthly
statements will now be sent quarterly.
B.
Determine applicable asset valuation
date.
C. Determine
provisions for late or extended
payment.
D.
Consider timetable for payment of New York estate tax. Within six months of date
of death, a payment should be considered for at least 90% of the New York estate
tax eventually determined to be due. Request that attorney/accountant submit the
state inheritance tax return to you for review no later than three weeks
before due date
XII. Termination.
92. Review
Final Accounting.
93. Advise beneficiaries of final
outcome of estate tax audit.
97. Close the estate.
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