Common Assets to Look for as an Executor
If you've been following along, last week we started a discussion on what to expect from the probate process if you've been named an executor of the estate. If you missed it, be sure to go back and read that article. This week, we're going to continue the conversation and talk about what you should do with a decedent's assets. Here are 6 common assets you should look for as an executor and how to manage them with the help of an estate attorney in Raleigh, NC
Step 1: Make or Obtain a List of Assets
Oftentimes, in the process of creating an estate plan, a person will create a list detailing all of their assets, the location of those assets, beneficiaries, and contingent beneficiaries. These are referred to as a Summary of the Will and should be presented to you when you review the Will with your estate attorney in Raleigh, NC. However, if no such document or list exists, it is up to the executor to create a list.
Typically, you'll want to look for any ownership documents such as titles and deeds, account statements, maintenance records, and receipts. Consider what you own yourself and go from there as people tend to open the same collection of things. Make a list of any assets you come across and crosscheck them with the Will. You'll want to match assets to beneficiaries. If available, note the date-0f-death fair market values for estate assets including obtaining appraisals and filing an inventory of assets with the probate court. Your estate attorney can help you through this process.
Common Assets that Your Estate Attorney in Raleigh can Help You Discover
1. Transfer on Death Assets
As an executor of an estate, the Will is your primary guide for dispensing assets. However, many large assets (ex. bank accounts or retirement savings accounts) have their own beneficiary designations that can be transferred upon death (also known as TOD or transfer-on-death) or payable on death (POD). Your estate attorney in Raleigh, NC can help you make sense of any TOD assets.
You'll also want to check for any trusts in the process of collecting assets. Trusts are usually mentioned in the Will, but you need to read the details of each trust in the trust documents available from the estate attorney who set up the trust. We find that trusts are often directed to be set up from a Will as a way to safeguard assets for young children (usually released when a child reaches 18 or 21 years of age).
On the other hand, trusts can also be created shortly after the testator's death. These are created to manage the assets of the deceased on behalf of the beneficiaries and are most often used as a way of reducing estate tax liabilities and ensuring professional management of the assets of the deceased. Testamentary trusts will specify how the assets can be used, as well as how the trustee should make decisions about spending money designated to children, among other things.
3. Joint Ownership Deeds and Retirement Accounts
Similarly related to trusts, as an executor of an estate, you'll want to look for any joint ownership deeds, and retirement account statements that include beneficiary names and directives. Oftentimes, these accounts have specific instructions that you must follow.
Most executors to an estate expect to manage some amount of cash as it's a common asset bequeathed in a Will. However, cash cannot be taken out of another person's inherited assets. Any money disbursements must come from the residuary estate, or the remaining property of the estate after all debts, expenses, and specific bequests are paid. Your estate attorney in Raleigh can help you determine timing and interest payments on any cash gifts.
5. Conditional Gifts
While not an asset, a decedent may have assets bequeathed in the Will that are conditional. This means that an asset may only be delivered to a beneficiary if certain conditions are met. For example, the decedent's grandson must be sober for one year before receiving his inheritance. Many times conditional gifts do not carry a specific
time frame, however, they should be handled prudently. As the executor, you'll need to have a conversation with the beneficiary on meeting the request and agreeing to terms before moving forward.
6. Other Items
As executor of an estate, you will come across a number of other items that may or may not have been defined in the Will. These include everything from real estate property (the decedent's home) to furniture, vehicles, and more. It is your responsibility to distribute the assets, which can cause strain on the family. To avoid dispute, you may consider hiring a mediator, liquidating the assets (for equal distribution), or deferring to an independent fiduciary to make decisions.
As it relates to household items, there are a number of ways to distribute assets. We will discuss this point further in another post, but two common approaches we see are to take turns or use a lottery approach.
Discovering and distributing assets can be a lengthy process if you've been designated as the executor of an account. We encourage you to seek the help of a qualified estate attorney in Raleigh as well as a forensic accountant who can assist you in answering any questions you may have about provisions in the Will, financial issues, and laws.