Q. I recently read in a Virginia publication about a man who was grieving the loss of his mother, who died during the Coronavirus pandemic, while experiencing what he referred to as the “awful business of settling the estate.” He goes on to describe the headaches involved with closing her investment accounts and nightmare of dealing with the telecommunications company.
I decided to ask my son to be the executor of my estate, but I would hate for him to have to deal with the things the author described. Do law firms, such as Farr Law Firm, deal with estate administration to alleviate these types of headaches? Also, what is involved in being an executor, so I can explain what the role will entail? Thanks so much for your help!
A. In the article you are referring to, “The Death Game: Big Corporations and Tactics they Use to Drain Money from the Departed,” author Bob Lewis describes the nightmare experience he had an as executor of his mother’s estate.
Similar to many people, Lewis didn’t know what to expect and how demanding his role would be as executor. He didn’t anticipate the incredible expenditure of time and energy it would take to liquidate, transfer, and consolidate his mother’s financial assets, which he accurately describes to be similar to a full-time job for four months!
The Biggest Hurdles Lewis Faced as an Executor
Lewis’ biggest hurdles came from the bank when he was trying to liquidate his mother’s brokerage accounts and was sent to numerous places and people and given contradictory advice until he got an accurate answer from someone, and only after many painful and wasted hours was the issue finally resolved. He also experienced a trying situation with the telecommunications company when he attempted to cancel home telephone, internet and TV services, to close the account, and to discontinue the $200 monthly drafts on his mother’s bank account. Despite his calls and his pleas to cancel, each new month brought new phone, internet, and TV bills, necessitating multiple follow-up calls each time. After three months of calling, he finally got a letter from the telecommunications company alerting him that the draft had been canceled and imploring him to reestablish it, which he of course would never do because his mother passed away and the company was a nightmare to deal with! Lewis didn’t release any company names but he believes from his experience that “these companies are not alone in making it all but impossible to close and settle the dead’s accounts from which they profit, even marginally.” Luckily, there are ways to avoid such nightmares, as I will explain later in this article.
What Does an Executor Do?
Being an executor is an arduous task, as you can see from Lewis’ experience. In the past, we have written about executors and what their roles entail. In a nutshell, an executor is responsible for closing accounts, as Lewis did, and many other duties, as follows:
Fiduciary Duty: Executors must act with honesty and good faith, and in the best interest of the beneficiaries of the estate.
Probate: It is the executor’s first responsibility to probate the Will, which involves filing of numerous documents with the court system, and the payment of probate taxes, executor’s commissions, and other costs and fees that will typically consume 5% to 8% of an estate. Often, funds cannot be disbursed without the approval of a probate judge or commissioner.
Managing/Disbursing Assets: The executor locates, manages, and disburses the assets of the estate. He or she determines the value of all estate assets such as real estate. In many cases, such property will need to be liquidated in order to pay the estate’s debts.
Burial Expenses: One of the frequent responsibilities of an executor is to use the estate’s funds to pay for funeral and burial expenses, or to reimburse a family member who may have paid for those things because of the urgency of the situation. The funeral home will also provide the executor with copies of the death certificate, which will be needed for several purposes, including closing financial accounts, canceling any federal benefit payments, and filing the final income tax return.
Debts: The debts of the deceased person become the debts of the estate, and the executor must generally pay all legitimate debt before making distributions to beneficiaries. But if the estate does not have enough money to pay all the debts, meaning that the estate is insolvent, then the executor will have to follow very strict requirements set out in the statute as to what creditors to pay and in what order.
Taxes: The executor Will often need to file a final tax return of the decedent, and will often need to pay required taxes from a bank account set up in the name of the estate.
Care for estate’s assets: The executor must care for the estate’s assets until they can be distributed, by ensuring that property is properly cared for and that funds are invested prudently.
Liability: If an executor mismanages estate funds and this results in a loss for the beneficiaries, the executor can be found personally liable.
For more details on what the role of executor entails, please read my article, “Ask the Expert: What Does it Really Mean to be Named as an Executor?”
How We Can Help with Estate Administration
As you can see, being an executor of even a simple estate can be a complicated job. Determining or delivering on someone else’s wishes can be a lengthy, involved, and difficult process that requires the executor to stay on top of deadlines, filings, and notices, and to assume personal liability. Consulting an experienced probate attorney (also called an estate administration attorney), such as those at the Farr Law Firm, will make your job simpler and ensure that the job is done right.
The Farr Law Firm’s probate law and estate administration division handles all aspects of estate administration, employing a team of professionals with wide-ranging expertise. Our probate and estate administration services include:
- Preparation of Federal estate tax returns, Form 706, and applicable State inheritance/estate tax returns;
- Preparation of judicial and non-judicial fiduciary accountings for trusts and estates;
- Preparation of fiduciary income tax returns for trusts and estates, including income tax planning to minimize income taxes;
- Preparation of Federal and State gift tax returns;
- Post-mortem planning, including use of disclaimers, small business succession, and redemption of shares of closely-held businesses;
- Working with executors, trustees, beneficiaries, and accountants to minimize estate tax and income tax;
- Assistance to executors in navigating through the estate administration process;
- Assistance to beneficiaries in resolving family disputes regarding inherited or inheritable assets;
- Assistance with valuation of closely-held business interests to minimize estate tax.
To learn more, please click here. To get started, please see our Levels of Planning for Trust and Estate Administration and then download our Intake Form. Please note that a last will and testament puts your estate through probate, so if you want to avoid all of the hassles that make up the probate process, you should consider a living trust. There are two main types of living trusts designed to avoid probate, the revocable living trust and the Living Trust Plus®, which protects your assets from probate PLUS lawsuits PLUS veterans benefits for qualified veterans PLUS Medicaid.
Get Started With Your Estate Planning Today
Now that you know more about what the role of executor entails, be sure to tell your son what he can expect and that we are here to help!
When it comes to estate planning, we here at the Farr Law Firm have strategies in place to help all types of people at all ages to plan for themselves and their loved ones. By planning in advance, each person can retain the assets it has taken a lifetime to accumulate and the peace of mind that their family’s needs will be adequately and properly addressed. If you or members of your family have not done Incapacity Planning, Estate Planning, or Long-term Care Planning, or if a loved one is beginning to need more care than you can handle, please contact us as soon as possible to make an appointment for an initial consultation:
About Evan H Farr, CELA, CAP
