Top 51 Tips for Executors, Administrators, and Trustees

Top 51 Tips for Executors, Administrators, and Trustees | The Pollock Firm

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It can be a lot of work acting as the executor or administrator of an estate or trustee of a trust. It is also easy to make mistakes. I was speaking with my business partner, Elizabeth Ketterson, head of our Estate and Trust Administration department, and here are our top 51 tips for executors and trustees of revocable trusts.

Tips for Executors, Administrators and Trustees Before Death and Immediately After Someone Passes

1. Seek Professional Guidance

Consult with professionals experienced in estate and trust administration matters. This includes attorneys, accountants, and financial advisors. Some estates can be simple and others are more complex. Some executors and trustees want to do everything themselves; some want to have professional advisors do the bulk of the work. Most will want to do part of the administration with the guidance of experienced counsel. Experienced professionals will be able to assist you in the manner that you wish and help you understand what you can legally delegate or outsource.

2. Understand Your Role

Familiarize yourself with the responsibilities and duties of an executor or trustee. Be aware of state-specific laws governing your estate or trust.

  • Pro Tips for Executors and Trustees: Understand the probate process in your jurisdiction and follow the necessary legal procedures. You may not even need to probate the Will and serve as Executor. (Many clients choose to structure their assets so that they are owned by a trust, have joint ownership on accounts, or have beneficiaries for their assets in order to avoid probate.) So, if there is nothing in the name of the decedent, you may not need to probate the Will.
  • Pro Tips for Executors and Trustees: You are not legally obligated to serve as the executor or trustee. If the situation is not right for you, consider whether you should accept the role. It is far easier to renounce your right to serve than it is to take on the role and then resign.

3. Information Is Key – Get Access To Information As Soon As Possible!

Look for mail, the Will, statements, and other important documents as soon as possible. This is particularly true if you think others may do something nefarious with this information. Speed is key.

  • Determine if you are dealing with an insolvent estate ASAP!
  • Determine if there are assets in more than one jurisdiction. You may need to file for ancillary probate in another state or country and travel may be required.

4. Organize Important Documents

Gather and secure the most important documents such as the WillRevocable Living Trust, insurance policies, and financial statements. Focus on statements that show the values as of the decedent’s date of death. (This tip is slightly different from above as it is more about organizing the information rather than quickly obtaining it.)

5. Review Contracts Timely

Evaluate any existing contracts or obligations and deadlines. This is particularly important if there is a business involved or if there is the sale or purchase of a major asset pending.

6. Budget your Time

Acting as an Executor or Trustee can be a tremendous amount of work. You will NOT be able to accomplish all you need to do in one day.

  • Pro Tips for Executors and Trustees: Consider taking at least 1-2 days off per month if you are working so that you can address some of your responsibilities. You often will need to go to the bank or consult with professional advisors during typical business hours. At a minimum, consider reserving select days so that you can use them if you need to.

7. Work with the Funeral Representative to Set a Budget and Expectations

You, as executor or trustee, may not be the party responsible for arranging the funeral, reception, and related tasks. If that is the case, you may need to work with that party to set a budget for the burial, cremation, reception, headstone, etc. While this needs to be one of the first things you do, it will be hard to give accurate guidance unless you know a little about the decedent’s assets AND who the beneficiaries are.

  • Pro Tips for Executors and Trustees: If the Decedent had a beneficiary on all of their assets and there is no central pot of money to pay bills, you may not be able to do your job effectively. Speak with legal counsel as soon as possible if there are no funds available to the estate or trust to pay bills.

8. Double Check Death Certificate

Ensure the accuracy of the death certificate before proceeding with legal matters. Incorrect information on the death certificate is of the biggest reasons for delay in an estate administration. Inaccuracies on the death certificate might prevent life insurance claims from being processed and it may also create problems when trying to probate the Will in the correct jurisdiction.

  • Pro tips for executors: Double check the “also known as section” if you believe that the person used multiple names and has accounts under various aliases. This can often be true for women set up accounts using their maiden name.

Tips For Executors, Administrators, and Trustees after Qualifying

9. Secure Property

Safeguard the decedent’s property to prevent theft or damage.

  • Family Heirlooms: Handle family heirlooms and sentimental items with care.
  • Thoroughly Search the Decedent’s Property and Belongings: You never know where you might find cash, hidden treasures, weapons, life insurance policies, or amendments to the Will!
  • Be purposeful and thoughtful: Don’t give away property or information to easily or quickly. You may need to make sure items have special storage or insurance.

10. Create an Inventory

List all assets and debts of the deceased.

  • Pro Tips for Executors and Trustees: Consider working with appraisers and other professionals to confirm value.

11. Locate Beneficiaries

Identify and locate all beneficiaries named in the Will. Once in a while you may need to hire an investigator to track down long-lost relatives or friends.

12. Notify Relevant Parties

Inform key individuals and institutions about the decedent’s passing.

13. Guardianship of Minors

Address guardianship arrangements for minor children.

14. Obtain a Tax ID for the Estate or Trust

  • Pro Tips for Executors and Trustees: When obtaining a tax ID (sometimes called a “TIN” or “EIN”), use the official IRS website if handling it yourself. NEVER use a website that requires you to pay – the IRS does not charge to obtain a tax ID. Remember, when the Grantor of a revocable living trust passes away, the trust will usually need a new tax ID number as the trust typically becomes irrevocable at that point.

15. Set Up an Estate Bank Account

Open a separate account for managing estate finances. (This step may or may not be necessary if everything is owned by a revocable trust.)

Publish legal notices to beneficiaries or creditors according to each state’s requirements.

17. State Benefits

Determine if the estate is eligible for any state benefits or exemptions. For example, in Pennsylvania, you receive a 5% discount on the Pennsylvania Inheritance Tax if you pay within 3 months from the decedent’s date of death.

18. Insurance Claims

File any necessary insurance claims promptly.

19. Valuation of Assets

Determine the value of each asset to facilitate distribution. This may require an appraisal. We typically recommend appraisals for real estate, businesses, and tangible personal property (e.g. jewelry, musical instruments, or artwork).

20. Distribution of Personal Items

Establish a fair process for the distribution of personal items. There is a delicate balance between protecting important items and documents versus purging junk. Take the time to make sure things aren’t thrown away or given away too quickly. Monitor any cleanouts by family or professional disposal companies that you hire.

21. Step Up in Basis

Ensure a step-up in the basis of assets before selling or transferring securities.

  • Pro Tips for Executors and Trustees: Work with a financial advisor or identify the “estate” or “Decedent Account” department for each financial institution where the decedent held their accounts.
  • It is important that a step-up in basis is assigned to assets before selling them, otherwise there could be a significant tax upon the sale of such assets which could otherwise be avoided or minimized.
  • We recommend getting a statement or document that shows “date of death values” for all securities at the same time you make the request that the assets receive their step-up in basis. This will make it easier to prepare any estate or inheritance tax returns.

22. Obtain a Credit Report for the Decedent

As soon as you are legally authorized to do so, contact the credit reporting agencies to determine all open accounts and outstanding balances.

23. Verify Debts and Investigate Potential Liabilities

Carefully verify any outstanding debts claimed against the estate to determine whether someone other than the estate is responsible. Additionally, investigate any potential liabilities the estate may face.

  • Pro Tips for Executors and Trustees: There is an order of priority when it comes to the payment of debts from an estate. Consult with a professional to decide what debts can and should wait to be paid. If there isn’t enough money to pay all debts, do NOT give any money to the beneficiaries. Make sure you truly understand your state’s order of priority for payments, otherwise you could be personally responsible. Funeral and burial expenses and taxes typically have the highest priority.

24. Terminate Services and Subscriptions

Cancel utilities and services for properties not in use. Cancel subscriptions, memberships, and services tied to the deceased.

  • Pro Tips for Executors and Trustees: Monitor the decedent’s bank account to see if there are any auto-debits from the account.

25. Notify Creditors

When you notify creditors of the decedent’s passing ask if they will waive late fees and interest.

26. Pay Bills of Decedent

Prioritize which bills must be paid from available funds.

  • Pro Tips for Executors and Trustees: Many websites advise that you pay bills “promptly”. We recommend a thoughtful approach. Utilities, mortgage, car and home insurance have serious consequences if ignored. Payment of some credit card balances might be negotiated, and waiting on medical bills to be presented to multiple insurance carriers may result in balances being lowered or eliminated.

27. Don’t be Afraid to Outsource Various Responsibilities

You do NOT have to do everything yourself. You can hire a clean-out crew (once you have safely removed important paperwork and safeguarded the valuable assets). You may hire income tax professionals and investment advisors. You may also wish to hire someone to run the decedent’s business.

28. Speak with a Realtor Before Fixing Up a Property

If you plan to sell real estate owned by the decedent, we strongly recommend speaking with an experienced realtor to understand the market and what, if anything, should be fixed up or staged to get the best price in the shortest amount of time.

 29. Distribution Timeline

Establish a realistic timeline for asset distribution and make sure to communicate that with the beneficiaries.

  • Pro Tips for Executors and Trustees: We strongly recommend being conservative in your time estimates. Most people have never managed an estate and it usually takes much longer than many people realize. Understand that some beneficiaries will start getting suspicious if they haven’t received their inheritance in a matter of weeks. Proactive communication can help.

30. Keep Detailed Records

Maintain accurate records of all transactions and communications related to the estate. Clearly document decisions and gather helpful backup, particularly if you think there may be an estate litigation.

31. Income Tax Obligations

Understand and fulfill any tax obligations, including filing income tax returns for the Decedent’s year of death and for the estate or trust, ensuring returns and taxes for prior years were filed and paid. Make sure to double-check when the decedent’s last return was filed. If a decedent was ill for a while, they may have failed to file the previous year’s return.

  • Pro Tips for Executors and Trustees: The Decedent may also be entitled to a refund from previous years and it is possible that prior returns may need to be amended.

32. Inheritance and Estate Tax Returns

Consult with a professional to determine if federal estate tax returns, state inheritance tax returns, or state estate tax returns need to be filed or if there are any taxes due. Depending upon the state law and the Decedent’s Will, the estate may be responsible for the tax or the beneficiaries may be responsible for the tax.

33. Communication

Keep open communication with beneficiaries and heirs throughout the process.

  • Pro Tips for Executors and Trustees: If you have trouble communicating with any of the beneficiaries, let legal counsel do it for you. Communication is often key to avoiding estate litigation lawsuits.

34. Address Digital Assets

Identify and handle digital assets, including social media accounts and online subscriptions. You may need to safeguard photos, emails, and other sentimental items.

35. Monitor Investments

Monitor and manage investments wisely. We strongly recommend working with financial advisors with respect to the management of the assets and working with both financial advisors and the beneficiaries to decide upon a liquidation strategy.

  • Pro Tips for Executors and Trustees: If you know that there is an asset (such as stock that has appreciated substantially since the decedent’s date of death) and one beneficiary wants that stock, then rather than liquidating that asset, it is usually in everyone’s interest to develop a distribution plan for all beneficiaries to minimize the taxes on a sale of an asset like that.
  • Additional Tips for Executors and Trustees: Historically, and in volatile markets, it was recommended that you sell the assets as soon as practical after the decedent’s death to avoid market fluctuation. Now the best advice is to consult a professional with respect to each asset. For example, perhaps the decedent owned lots of cryptocurrency, or a business, or a substantial concentration of stock, or a valuable asset that is incredibly expensive to insure. Each of those assets could require a custom decision concerning how you deal with them.

36. Handle Business Interests

If the decedent had business interests, address them appropriately.

37. Protect and Maintain Property

Maintain and secure real estate until it is distributed or sold.

38. Avoid Titling Assets Personally

Don’t title assets in your own name; maintain the separate identity of the estate or trust and your title as Executor, Administrator, or Trustee – as the case may be.

39. Review Will/Trust Periodically

Periodically review the Will/Trust to ensure that your actions are consistent with the decedent’s wishes.

  • Pro Tips for Executors and Trustees: We strongly recommend reviewing the Will and Trust again before developing a distribution plan. We find that many people think money will be going outright to beneficiaries when in fact the distribution should be going to a trust instead.

40. Charitable Bequests

Notify charities of their expected inheritance and allow for the possibility of rejected inheritances. Do not assume that they will want to accept distributions of artwork or real estate.

  • Charitable Oversight. When there is a charitable beneficiary, there may be special procedures that must be followed depending upon the jurisdiction. For example, New Jersey requires that the state Attorney General be notified in writing of charitable bequests and require receipt of an accounting if the charity is given a percentage of the estate/trust.

41. Specific Bequests

If the Decedent made a Specific Bequest (a gift of a certain amount or a certain asset) to be distributed to a beneficiary, that should be distributed to the beneficiary within one year, absent special circumstances.

  • Pro Tips for Executors and Trustees: When real estate is involved, technically it belongs to the beneficiary immediately and the beneficiary can use it and should start paying all costs associated with that asset. 

42. Executor Commission and Trustee Commission

Don’t feel guilty about taking a commission; recognize the effort and work involved. However, also recognize that in some family situations, this can create a rift. There is never an easy answer to this question. However, the more work you do and the more you sacrifice personally and financially, the more you should communicate your need to be compensated.

Tips for Executors, Administrators and Trustees Before Closing out the Estate or Trust

43. Distribution Plan

Develop a fair and transparent plan for distributing assets. Understand that in some states like New Jersey, you will need to conduct a child support search before distributions can be made.

  • Pro Tips for Executors and Trustees: We strongly recommend that you show you will keep a reserve to handle any outstanding debts that may come up after you distribute the majority of the funds, and then plan to distribute that balance once it’s very clear that there are no more expenses and the final tax returns have been filed and accepted.

44. Understand That You Can Make Multiple Distributions From an Estate/Trust

You do not have to distribute everything at once. Most larger estates and trusts will make at least one partial distribution before making a final distribution. Once you determine the remaining liabilities of the estate or trust, you can distribute the excess funds that you don’t need to the beneficiaries, and hold an appropriate reserve. This minimizes contention, reduces your risk, and enables beneficiaries to start utilizing their inheritance.

  • Pro Tips for Executors and Trustees: Consult with your attorney or accountant about the tax advantages of making a partial distribution as income earned in the name of the estate or trust is often taxed at the highest rates.

45. Accounting

Keep accurate financial records and provide an accounting to beneficiaries. Depending upon the family dynamic, this could be a very simple informal accounting or a formal accounting.

  • Pro Tips for Executors and Trustees: Consider the benefit of showing you how much of a commission you would be entitled to on an accounting, even if you decide not to accept it.

Seek consent from beneficiaries before making decisions that would benefit you, even if it seems fair. For example, if you and your sibling are the only beneficiaries of an estate, you may think it is fair to take a house worth $250,000 and give cash of $250,000 to your sibling. DON’T DO IT WITHOUT CONSENT. They may accuse you of self-dealing saying the property is worth more than the $250,000.

I know we alluded to this tip above, but we can’t overstate the importance of making sure that you actually pay the appropriate beneficiaries. Don’t give money to an individual if you should be sending the money to a trust for that individual.  Be sure that you know the legal meanings of the terms “children”, “issue”, “issue per stirpes”, and “per capita”.  These things may be defined in the Will or Trust in a manner different than the plain meaning of those phrases.  This is one of the biggest mistakes many executors and trustees make.

Obtain consent from beneficiaries before distributing assets from the estate or trust to the beneficiaries.

  • Pro Tips for Executors and Trustees: Many states require that the beneficiaries sign off on a waiver and/or release before they receive ANY inheritance. Even in situations where everyone gets along, there is only a benefit to having people acknowledge in writing that you did your job properly and that they received everything that they were supposed to receive.

49. Don’t Close out the Estate Account Too Quickly

Avoid closing bank accounts too early, as refunds may come over a year after the decedent’s death. Obtain another credit report for the decedent to confirm all accounts are cancelled.

50. Avoid Income-Producing Accounts in the Final Stages of the Administration

After you have distributed most of the assets out, and you are merely holding a reserve, avoid investing that in income-producing accounts. The income may give rise to the need to prepare another income tax return, thereby requiring the estate/trust to continue to stay open. This could create a circular problem. You can’t close the estate/trust until the returns are filed, and you need to keep the accounts open so that you can pay the accountants and taxes.

When the time comes, follow the legal procedures for closing the estate, including obtaining necessary court approvals and releases for any surety bonds. 

While it is always best to consult with an experienced probate and estate administration attorney, we hope that you found these tips for executors to be helpful. Special thanks to Kimberly Hartman, our esteemed Estate Administration Paralegal, for help with this article.

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