Estate settlement should be as straightforward and non-disruptive as possible for your family.

  • Proper planning can make estate settlement a smooth process for all concerned by ensuring that all legal and tax requirements are met.
  • Having a current Will in place is a critical first step and will ensure that your wishes are carried out as you intend.
  • Serving as Executor can be complicated and time consuming, so it’s important to name someone who is able and willing to take on this responsibility.

The days and weeks following the death of a loved one can be a difficult time, especially when it comes to settling the estate of the deceased. Proper planning, however, can make estate settlement a smooth process for all concerned by ensuring that the wishes of the deceased are carried out and that all legal and tax requirements are met.

The cornerstone of any estate plan is a Will. Nearly everyone knows this, of course, but they often put off drafting a Will because they believe it will be too expensive or will make them feel uncomfortable. However, not having a Will may cost you more money in the end and make it harder to work through the estate settlement process. If you die without a Will, the state will step in to dispose of your assets— a prospect that most of us would not welcome.

Choosing the right Executor

As part of the Will-drafting process, you will have to choose an Executor. This is a critical decision since the Executor is responsible for seeing that the estate is settled in accordance with the wishes of the deceased.

Being named Executor is considered an honor, but this role can be complex and time consuming. Tax regulations and other laws affecting estate planning are subject to frequent change, and many Executors come to learn that they have neither the time nor the expertise to keep abreast of such changes. As a result, it may be beneficial to name a corporate fiduciary as Executor or Co-Executor to attend to the details of your estate administration.

The Executor’s responsibilities come into play when it is time to settle the estate. Typically, estate settlement involves four major steps:

  • Identifying and valuing estate assets. An Executor must value all assets in the estate, including securities, business interests, and retirement plans as well as arrange for professional appraisals of such items as real estate, artwork, and jewelry.
  • Paying creditors, estate expenses, and taxes. The Executor must ensure that there is sufficient cash to pay legitimate creditors and related estate expenses, which may include sizable taxes. In this role, the Executor may have to make crucial decisions to sell securities or other assets.
  • Preparing and filing the necessary tax documents with federal and/or state authorities. Impeccable recordkeeping is essential to ensure that documentation is accurate and complete. Complex tax reports and probate documents must be filed in accordance with specific deadlines.
  • Distributing assets to beneficiaries. This requires that the Executor make decisions in a timely fashion, since the distribution of bequests and residuary assets should be carried out in a prudent and efficient manner.

Estate settlement should be as straightforward and non-disruptive as possible for your family.

This article is for informational purposes only and is not intended as an offer or solicitation for the sale of any financial product or service. It is not designed or intended to provide financial, tax, legal, investment, accounting, or other professional advice since such advice always requires consideration of individual circumstances. If professional advice is needed, the services of a professional advisor should be sought.