Settling an Estate: A To-Do List for Executors

When a loved one passes away, there is a lot to think about during this difficult time. If you have been named an executor for the deceased, there is added responsibility, especially when it comes to finances. Once you have coordinated any funeral arrangements and personal responsibilities, there is a checklist of to-do’s within the first several months that will help make the process smooth and efficient. Below we’ll walk through what is needed from the executor.

• Apply for an employer identification number (EIN) for the estate. This is important because you will use this EIN number on all tax returns, statements and other important financial documents. You can apply for and receive an EIN online. You may also need to apply for an EIN for a revocable trust or other trusts created at death.

• File all tax returns, including income, estate, and gift tax returns when due. A federal estate tax return may need to be filed within 9 months of death. State laws vary, but state estate tax and/or inheritance tax returns may also need to be filed. Federal and state income taxes are due for the year of death on the normal filing date, unless an extension is requested. If there are trusts, separate income tax returns may need to be filed. Seek the advice of a tax professional to ensure you’re paying all necessary taxes on time. Beneficiaries may need to be notified as well since distributions from the estate may impact their tax returns.

• File the will with the appropriate probate court. If real estate was owned out of state, file ancillary probate in that state also. If there is no will, contact the probate court for instructions, or contact a probate attorney for assistance.

• Notify creditors by mail and publish notice for unkown creditors. Claims must be made within the statute of limitations, which varies from state to state, but 30 days from actual notice or six months from publishing is common. Insist upon proof of all claims.

• Report the death to Social Security by calling 1-800-772-1213. If your loved one was receiving benefits via direct deposit, request that the bank return funds received for the month of death and thereafter to Social Security. Do not cash any Social Security checks received by mail. Return all checks to Social Security as soon as possible. Surviving spouses and other family members may be eligible for a $255 lump-sum death benefit and/or survivor benefits. Visit ssa.gov for more information.
  
• Make a list of assets. Put safeguards in place to protect any property. Make sure mortgage and insurance payments continue to be made while the estate is being settled.
  
• Contact past employers. Reach out to their employer and past employers regarding retirement plans, and contact any IRA custodians or trustees. Review designated beneficiaries and post-death distribution options.

• Locate insurance policies. The policies could include individual and group life insurance, mortgage insurance, auto credit life insurance, accidental death and dismemberment, credit card insurance, and annuities. Contact all insurance companies to file claims.

• Contact all credit card companies. Let them know of the death and cancel all cards unless you’re named on the account and wish to retain the card.

• Retitle jointly held assets. This includes assets such as bank accounts, cars, stocks, bonds and real estate.

• Look into buy-sell agreements. If your loved one owned, controlled, or was a principal in a business, check to see if there are any buy-sell agreements under which his or her interest must be sold.

• Update digital assets. As more people go paperless and digital assets like bitcoin become popular, an executor’s job can become even more difficult because the paper trail is reduced. As an executor, it’s important to understand their digital assets, including what social media accounts are active and any cryptocurrency they owned.

Having a proper estate plan in place can help avoid any confusion or tough decisions after passing. Anders has Family Wealth and Estate Planning advisors that can help. Contact an Anders advisor below to learn more.