What should I do as my loved one’s Trustee or Executor?

In general, all Trustees and Executors face similar duties and responsibilities regardless of the size of the estate. All steps in the administration of the estate are more or less directed toward three goals: Collection and management of assets; payment of debts, taxes and expenses; and distribution of the balance of the estate assets to the named beneficiaries.

1. Collection and Management of Assets:
   The first duty of a representative is to protect and preserve the estate assets. The representative should attempt to put together an inventory of all assets and their values as of the date of death.

   Examples of assets can include:

   • Copies of tax returns for last three (3) years
   • Stocks and Bonds held in person and/or statements from all brokerage accounts and other financial institutions
   • Real Estate Deeds
   • Mortgages, Deeds of Trust and other Notes
   • Cash accounts (checking and savings)
   • Inventory safe deposit box
   • Insurance policies
   • Jointly owned property or joint accounts
   • Other miscellaneous property
   • Transfers during decedent’s life (taxable gifts; e.g., over $10,000)
   • Powers of appointment
   • Annuities

   Valuables, such as securities, jewelry and other personal items of substantial value should be kept in a safe place such as a safe deposit box, to which only representatives have access. Additionally, the Grantor may be entitled to various proceeds or income to be collected and/or located and accounted for, such as:

   • Life Insurance proceeds
   • Employer pension and insurance benefits
   • Salary or other income payable after death
   • Deferred compensation
   • Vacation pay
   • Social Security benefits
   • Social Security burial benefits
   • Burial benefits for the grantor from the state of residence
   • Veterans' Administration benefits

   The next step is for both the Executor and Trustee to check the powers that they will have over property by referring to the Will and the Trust documents. You should consult our firm if you have any questions. Provided that title of other assets was properly transferred into the name of the Trust, there will generally be no need for any immediate change of title. However, bank and savings and loan accounts and security brokerage accounts may need to be closed or have their ownership changed to reflect the representative's name. The representatives should thereafter maintain an accurate record of all deposits into and withdrawals from these accounts, reflecting the amount and sources of each deposit and the amount and purpose of each check drawn.

   The representative will not just ascertain what property belongs to the Trust, but must also establish the value of the property. The value of the property must be known for a number of reasons, among the most important being determining whether an Estate Tax Return must be filed, monitoring investment performance, and determining whether each beneficiary has received his appropriate distribution. The value of property is usually established by appraisal, and this must be coordinated with an expert for the type of asset in question. Therefore, assets requiring appraisal must be identified fairly early. Types of assets requiring expert appraisals include:

   • Real estate
   • Business interests
   • Jewelry
   • Artwork

   Of course, the representative may be succeeding to office on account of a prior representative’s incapacity or resignation. In such case the records of the Trust may be current as to property owned and its fair market value. Although the Trust absolves the successor representative from the acts of his or her predecessor, and permits him or her to accept the predecessor’s accounting without inquiry, it is prudent for the new representative to verify the statements of his predecessor. Whether the representative succeeds on account of the death or incapacity of the Grantor, in either case he or she will need to change signature cards on bank accounts and have new checks printed. To make these changes, the Executor will need a copy of the Grantor’s death certificate or an affidavit certifying the prior Executor’s incapacity. Similarly, the Executor will need to establish authority with brokerage houses and other financial institutions.

   A representative should be sure to maintain adequate insurance on valuable assets by making sure that existing coverages will continue after the decedent's death and making a note of expiration dates on applicable policies, while also checking that coverage reflects current market values. Investment decisions will need to be made. Cash income not needed for other purposes of administration, such as immediate payment of expenses, should be placed in interest-producing investments. In due course, it may be necessary to sell some of the estate's property, either because an item should be disposed of to avoid needless expense or loss through depreciation in value, or to raise cash for payment of expenses, taxes or legacies to beneficiaries. Assets should not be sold before first consulting our firm, a CPA or an attorney to ensure that appropriate authority exists or can be obtained. Holdings in a closely held corporation, partnership or sole proprietorship may pose special concerns and problems -- the representative may be required to continue or windup the business in order to avoid a serious risk of loss to the estate. Again, our firm, or your CPA or attorney should be consulted before the representative acts with regard to any businesses.

2. Payment of Debts, Taxes and Expenses:
   We can advise you on the representative's duties and powers in this area. Creditor claims may need to be paid and, depending on whether they are paid from a probate estate or from the Trust, the representative may have different responsibilities and latitude. Death taxes may need to be paid and, even if taxes are not due, many estates will nevertheless be required to file a federal estate tax return. The estate tax return must be filed within nine (9) months of death. Certain elections and disclaimers must be made prior to filing the estate tax return; therefore, in some cases, the failure to file this return promptly may result in adverse tax consequences. Also, income taxes and returns may be due for the probate estate and the Trust. We ensure that you meet all deadlines and make the best elections under the law to minimize taxes.

3. Distribution to the Beneficiaries:
   Beneficiaries may be entitled to ongoing payments of income and/or principal for a period of time beginning with the death of the decedent, or may be entitled to lump sum payments. The representative may be allowed to distribute property in kind or sell properties and distribute cash. The provisions relating to the distributions to beneficiaries are contained in the Will or Living Trust document.

Upon final distribution of the remaining assets, it is advisable for the representative to obtain a receipt from each beneficiary. We can guide you through this process that you are able to make distributions as soon as legal and practicable.