When faced with the task of administering an estate and-or a trust, get professional help. You will be personally liable if mistakes are made.
You will owe duties of care to loved ones (family members), to the court (to comply with statutory requirements), to the federal and state taxing authorities (to properly report income tax and estate taxes), and to creditors of the deceased person who now want to be paid what they are owed. You will owe them duties of notice and careful recordkeeping.
The first thing you will need to do is to find the will and-or trust documents and get at least 10 original death certificates. If nominated, you will need to apply to the court to be appointed as the personal representative.
This involves submitting an application to the court with appropriate supporting documentation such as the original will and death certificate.
You will likely need to get tax identification numbers for the estate, for the trust if there was one, and for the trusts that might be designated to receive funds. You will need to identify and value the assets in the estate.
Assets will need to be properly categorized (taxable or nontaxable, probate or non-probate). It can take some time to properly identify all the assets a person owned. Professional help makes all of this easier.
If there are trust assets, the trust will govern those assets. If there are retirement accounts and life insurance, then the beneficiary designation on file controls.
After you have complied with all the paperwork related to notices to loved ones, and filing an inventory of probate assets, and paying creditors’ claims and the time period for creditors to make claims has expired, then you will be in the position of distributing to the beneficiaries their share.
Before making distributions, you will want to obtain a signed statement indicating the recipients acknowledge that they are getting what they are due.
You will need to know how to properly and legally effectuate the transfer of assets. Often this requires deeds that need to be recorded.
All these tasks and obligations might sound a bit daunting. When charged with administering an estate or a trust, consider getting some professional help. With good help, it will be much, much easier.
Otherwise, you might be liable to loved ones, liable to beneficiaries, liable to creditors, liable to taxing authorities and liable to the court for failure to fulfill your fiduciary obligations.
Mark F. Winn, J.D., Master of Laws (LL.M.) in estate planning, is a local asset protection, estate planning and elder law attorney. www.mwinnesq.com