Elder Law Articles, Uncategorized
Things You Need To Know If You Are Named Executor Of A Will Or Trustee Of An Estate
Note: In its original format, this article was published in January, 2000 in the Rosemont Chamber of Commerce Communique.
Things You Need To Know If You Are Named Executor Of A Will Or Trustee Of An Estate
copyright 2002, The Law Offices of Anthony B. Ferraro, LLC Overview. Quite often a good friend or a member of your family will have a will or trust drawn up and ask you to act as the executor or trustee. While this may make you feel you have been honored, people feel compelled to accept this office. This situation can also arise when someone has passed away and you must assume duties as executor or administrator of the estate. Quite often people wonder what the extent of their obligations will be and how to fulfill them. This article is intended to provided a very basic overview of the estate administration process dealing with responsibilities regarding the gathering of estate data, payment of debts, expenses, and taxes, and the distribution of the estate in accordance with the provisions left behind by the deceased. This is not intended to provide legal advice. It is hoped however that this information will enable one to understand what it is that they do not know and therefore seek professional advice. As the personal representative, you are primarily responsible for settling the affairs of the decedent.- Any property that the decedent held jointly with another person, such as a checking account, passed to the surviving joint tenant by operation of law upon the decedent’s death. Property that listed a beneficiary, such as the decedent’s life insurance contract, also passed automatically at death.
- Jointly-held property and property that listed a beneficiary designation are “non-probate” property and passed automatically to you or the designated beneficiary upon the decedent’s death.
- Any property that was titled solely in the decedent’s name is “probate” property and passed in accordance with the terms of the decedent’s will.
- Trusts;
- Pay-on-death accounts (POD);
- Transfer-on-death accounts (TOD);
- IRA’s;
- 401(k)’s;
- Joint tenancy property;
- Life insurance policies;
- Land trust agreements;
- Annuities; and
- Small Estate Affidavit (if less than $50,000 of personal property).
- Copy of Will (and codicils);
- Copies of Death Certificate;
- Copy of funeral bill;
- Documents concerning previous divorce or separation of decedent, if applicable;
- Documents concerning armed services record of decedent, if applicable;
- Copies of any will or trust agreement under which the decedent was a beneficiary;
- Copies of any will or trust agreement under which the decedent was acting as a fiduciary; and
- Copies of any trust agreements created by the decedent.
- Filing the will with the Clerk of the Court;
- Petition for Probate of Will and for Letters Testamentary;
- Evidence to the effect that the facsimile of the will is a true and correct copy of the will;
- Executor’s Oath and/or Bond;
- Affidavit of Heirship;
- Order Admitting Will to Probate and Appointing Personal Representative;
- Order Declaring Heirship;
- In Cook County, Designation Newspaper in which notices are to be published;
- Notice to Heirs and Legatees and Unknown Heirs of Their Rights to Require Formal Proof of Will.
- Create an inventory of assets;
- Gather information;
- Establish an estate checking account;
- Discuss banking procedures;
- Conduct a safety deposit box examination. Have access affidavit prepared beforehand;
- Consider ancillary administration and local counsel if property exists outside of the State of Illinois;
- Start a claims register and send notice to creditors in the register;
- Obtain appraisals of property;
- Make necessary tax elections if the estate is taxable;
- Establish the surviving spouse’s award;
- Consider disclaimers (This means considering the fact that somebody may wish not to receive what they are entitled to receive under the estate);
- Consider the sale of assets if necessary and consider the usage of auctioneers and brokers;
- File SS-4 to obtain FEI number;
- File final 1040 and 1041’s.The decedent’s estate is a taxable entity from the date of his death until all estate assets are distributed. The income earned by the property during this period must be reported on Form 1041. Every domestic estate with gross income of $600 or more during a tax year must file a Form 1041. Gross income of an estate includes dividends, interest, rents, royalties, gain from the sale of property and income from businesses, partnerships, trusts, and other sources. If the estate’s accounting period is a calendar year, Form 1041 must be filed by April 15th following the end of the tax year. You might want to consult an estate attorney on this matter.
- Be aware of capital gain tax savings;
- Obtain investment advice.
- Consider partial distributions.
- Consider the requirement to file a full and complete accounting to all of the beneficiaries.
- Obtain an estate tax closing letter, if necessary, from IRS;
- Obtain the distributees refunding bonds;
- Obtain Final Report of Independent Representative;
- Obtain Discharge of the Executor on Delivery of Receipts and Final Report to presiding Judge.
- Make final distributions.
- property held in the decedent’s name only;
- company and individual entities;
- one-half of property held jointly with right of survivorship;
- one-half of property held as tenants by the entirety;
- life insurance death benefit of policies in which the decedent was owner and insured; and
- life insurance cash value of policies in which the decedent was owner and someone else is the insured.