There’s plenty of advice out there for executors, but it generally comes from the perspective of estate planning attorneys. While they know a lot about the topic, there were some things from the perspective of a financial advisor that we wanted to dig into — things that others may not readily point out.
We think there are 10 things everyone could benefit from being aware of when it comes to managing the affairs of an estate:
- Your team
- Credit cards
- Stocks and bonds
- Rewards points
- Social media
Let’s dive into what we think executors need to know about these 10 things…
1. Assemble Your Team
In most cases, you’ll already have an attorney if your loved one created an estate plan, but if not, it’s important to find one you can easily work with and trust. (Let us know if you need a recommendation.) There is also great benefit in meeting with an experienced tax person right away. We know this from 25+ years of experience! There are decisions that should be made with the input of both parties, and this can delay things. For example, there are tax elections that must be made in a timely manner. So, don’t wait too long before you speak with a professional and get started.
2. Being a Co-executor Can Be a Pain
If you’re a co-executor, then all documentation MUST be signed by BOTH parties. I know of a family in Southern Illinois who made both their kids co-executors (probably in an effort to be fair), but one adult child lived in Puerto Rico and one lived in Texas. This made everything about the difficult passing of their parents even harder. Sometimes, it simply works better to only have one executor. An executor CAN REMOVE himself or herself by filing a document with the court. So, this is one solution. In addition, being an executor comes with responsibility and liability. If you’re not comfortable with what is required of you, then you don’t have to serve in that capacity.
3. Protect the Assets
An executor’s job is to PRESERVE the assets, not grow them. Let me say that again… an executor’s job is to preserve the assets of the estate. If the estate has investments in stocks or bonds, you might want to reduce the risk by selling any growth stocks or high-flying stocks. Consider what a market correction could do to the estate’s portfolio, and of course, we recommend speaking with a financial professional like us before you do anything.
4. Stay Liquid
This goes hand-in-hand with preserving assets. The estate will have bills to pay and may even have to make distributions. The cash needs of the estate must come first as you go about your job as executor.
5. Track Out-of-Pocket Expenses
An executor can be reimbursed for out-of-pocket expenses such as mileage to and from a place of business or farm. Be sure to keep really good records of your expenses and submit them for reimbursement on a regular basis.
6. Destroy All Credit Cards
All credit cards should be destroyed, and you should contact the three major credit bureaus as quickly as possible. This will flag any further attempted usage of the deceased’s information.
7. Assess Stocks and Bonds
Where are the investments being held? Are they in a brokerage account? Or are they at a transfer agent such as Computershare? The paperwork is totally different between the two. Transfer agents often require Medallion stamps and legal documents. If the documents aren’t filled out to a T, then they will send it all back.
Be careful here. Estates have much higher tax rates than individuals. If an estate has taxable income, it could save big tax dollars by making a distribution before year end. Even a small taxable income could make a big difference. This is why it’s so important to plan ahead and have a team. Our team has decades of tax experience, so we are always happy to answer your questions about this.
9. Rewards Points
What happens to the rewards points and frequent flyer miles of the deceased? This is a good question! And the answer is, “It depends.” Legally, the companies don’t have to do anything. Reward points and frequent flyer miles are not legally considered property. However, a phone call might be in order. Some companies, such as Chase, will mail a check for any remaining balance, less the amount due on the card. Others will allow pooling of points with family members.
10. Social Media
What about social media sites like Facebook? While you cannot “take over” someone’s personal Facebook or Instagram account, there is a procedure for the executor to delete the account. You could also memorialize the deceased with a closing post. Again, estate documentation and instructions are required.
I hope this not only helps you in your executor journey, but also gives you a few things to think about concerning your own final affairs. What you do ahead of time will make a BIG difference for your loved ones during one of the hardest times of their life.
Having a notebook or file of passwords and favorite sites can be quite helpful in the case of your own untimely demise.
We offer a free online asset called “The Vault” which can help keep things organized and gives access to your executor upon your passing. This sort of thing can make the transition a lot smoother for those left behind. Just give us a call or email us to ask about it.
At CSH we have over 25 years of experience working with estates and trusts. Whether it be a small family business that must be sold, or the transferring of the family farm, we’re here to help in any way that we can. Feel free to always give us a call with any questions you may have at 217-824-4211. We’re always happy to talk with you!