Where There’s a Will…

Amara Rose July 26, 2016 8

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How to Select, and Serve As, An Executor


We’ve talked briefly about estate planning and asset protection. But what about executing a will? Most seniors understand the importance of having a will, though they won’t be around to see it probated. And this is wherereverse mortgage news knowing proper procedure is critical.

What exactly does an executor (also known as a “personal representative”) do? According to The Office of Chronic Care Advocacy, the executor acts as a chief administrator of the estate:

• Ensuring receipt of all life insurance and retirement plan benefits
• Paying any estate debts or expenses
• Filing the necessary tax returns and paying the appropriate federal and state taxes
• Disbursing assets to the beneficiaries.

To choose an executor:

1. Select someone who is willing to serve. This may seem obvious, but many years can elapse between the time someone chooses an executor, and when that person needs to step into the role. It’s a major responsibility, and not everyone will want it. Provide for an alternate in case your first choice is unable or unwilling to perform. Naming a spouse, child, or other relative as executor is common, and he or she can hire professional assistance as needed.

2. Make sure there is no conflict of interest. A business partner or spouse from a second marriage, for example, could have personal goals that differ from those of the person seeking an executor.

For the executor:

3. Find the original will. Only an original will can be probated (have its validity verified in order to ensure the timely transfer of assets) without court intervention, which can be a lengthy and expensive process. Usual places to look are the senior’s office, desk or home safe — wherever he or she kept important papers. Another popular option is a safe deposit box, which the executor will need signatory authority to open. The executor can also call the attorney who drafted the senior’s will, who is likely to have noted where his client intended to keep it.

4. Familiarize yourself with the provisions of the will, so you understand the senior’s wishes as to how he or she wants the estate to be distributed.

5. Seek professional advice. In order to correctly administer the estate and avoid mistakes, at this point it’s wise for the executor to consult an estate attorney, tax accountant, appraiser, or any other professional(s) who can provide the necessary expertise.

6. Locate and protect the assets. The executor should also contact any life insurance carrier or retirement account custodian to determine who is named as the beneficiary of these accounts. It is possible that the estate will be the beneficiary, or the beneficiary could be a named individual.

7. Pay valid claims against the estate, assuming the estate has sufficient assets available. Depending on the circumstances, you may also need to file an income tax return for the estate for the year(s) in which the estate remains open.

8. Distribute the estate to the beneficiaries named in the will and account for the administration of the estate to the Commissioner of Accounts who was assigned to this estate when you qualified as executor.

The entire process can be complex, challenging and time-consuming, and can take a year to eighteen months to complete.

Reverse mortgage professionals may wish to share this summary with HECM clients, prospects and other seniors within your purview, since selecting an executor is as important as choosing a Power of Attorney and protecting elders from scams, identity theft, and other forms of financial fraud. The more informed and prepared someone is, the smoother the transition will be for everyone involved when the time comes.

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8 Comments »

  1. Dick Diamond July 26, 2016 at 5:38 am - Reply

    Really excellent, Amara. Right on target.

    One thing I would like to add is that if you move to another state, you should have your will reviewed since your old one may not be valid in your new residence.

    • Amara Rose July 26, 2016 at 9:32 am - Reply

      Dick,

      As usual, you add value and insight. Thanks so much!

  2. James E. Veale, CPA, MBT July 26, 2016 at 10:44 pm - Reply

    One of the primary duties of an executor or administrator is to wind up the affairs of the decedent. In many states, probate costs and fees can be mitigates through trusts. The will then becomes a vehicle to pass into trusts all assets not intended to be held in the estate for protection of the trust assets in case of litigation.

    Sometimes LLCs are used as additional means to protect trust assets against estate creditors or those who challenge the provisions of the will or even the trusts.

    To handle the intricacies of estates, trusts, and LLCs, it is best to use the services of a competent and experienced estate and trust attorney along with the help of a CPA competent and experienced in tax, estate, trust, and LLC matters.

    • Amara Rose July 27, 2016 at 9:07 am - Reply

      James,

      Thanks for adding value, and for reminding LOs to remind seniors that it’s always wise to seek expert guidance.

  3. Pat Smoot July 28, 2016 at 4:47 am - Reply

    Thanks for adding another tool to our tool box.
    I always share community help line, services available for the senior population, Fall Prevention safety check list to name a few educational pieces to share with clients.

    • Amara Rose July 28, 2016 at 8:58 am - Reply

      That’s great, Pat! The more resources our elders have at their fingertips, the safer and healthier their lives are.

  4. Sharon Paquet February 28, 2017 at 10:11 am - Reply

    My husband and I are disabled. I have a Trust naming my husband as executor. He has a power of attorney naming me. I own our home, he Is n o t on title. Our next door neighbors have helped us tremendously with Dr. Apps. Etc. How can they be added on as executors & power of attorney?

    • The Positive Realist March 2, 2017 at 12:12 pm - Reply

      Ms. Paquet,

      Wills have executors and trusts have trustees. My brother and I are co-trustees and co-executors for my father who is very old now.

      Make sure you are doing things right and seek the advice of a competent trust attorney.

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