If you have agreed to be the executor of an estate, you may have some questions about the tasks that must complete to settle the estate. In this post, we will provide a basic overview that will demystify the process to some extent.
Find the Physical Document
The person that asked you to be the executor of the estate will probably tell you where you can find the will, but this is not a given. They may feel as though it is not important that they get your approval at first, and they may never get around to it.
If necessary, you can go through all of their important papers to try to locate the document. You can also place a call to their lawyer if they have one, and the attorney may be able to help.
Admit the Will to Probate
Once you have the will in hand, you have to file it with the Surrogate’s Court in the relevant County. It should be noted that there is a simplified process in New York for estates that are valued at less than $50,000, but you would still have to go through the court.
When this has been accomplished, the court will recognize you as the administrator of the estate.
Gather Documents and Inventory the Assets
You should gather all the relevant documents, like paperwork related to financial accounts, documents related to the final income tax filing, and tax returns for the last three years.
All of the assets that comprise the estate should be inventoried during this initial phase, and real property should be properly secured. It is rather distasteful, but family members will sometimes decide that they are going to enter the home of the decedent and take what they want.
It is wise to have a discussion with the individual in question after they ask you to be the executor. The location of the will and all of the other documents that are relevant can be shared in a letter of final instructions.
They can pass along all information that you will need to properly administer the estate, including the location of keys, lockboxes, storage units, real property, and vehicles. Login information for financial accounts that are managed online should be included as well.
Open an Estate Bank Account
You are going to have to pay bills that are incurred during the administration process, and the decedent will have final debts that must be paid. To do this, you need an estate bank account, and you have to get an employer identification number from the IRS to open an account.
Value the Assets
If you are going to be slicing up a pie, you have to know the size of the whole. To this end, you should calculate the value of the assets that are going to be transferred to the beneficiaries.
This is relatively simple when you are looking at account balances, but appraisals may be necessary for real estate, collectibles, jewelry, art, and other tangible items.
Pay Final Taxes
Final income taxes must be paid, and in some cases, an accountant will be necessary. Estate taxes can also be a factor if the decedent was a high net worth individual.
The federal estate tax is applicable on transfers that exceed $11.7 million, and the New York estate tax can be levied on the portion of an estate that exceeds $5.93 million. These are the exclusion figures for 2021, and they are indexed annually to account for inflation.
Resolve Other Outstanding Debts
In addition to the tax responsibilities, you satisfy all legitimate creditor claims, and you pay the debts that were incurred during the estate administration process.
Distribute the Assets
When all of these matters have been resolved to the court’s satisfaction, you follow the instructions in the will and distribute the assets to the beneficiaries.
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