If you have a loved one who has passed on recently, and they have not created a last will and testament that has covered what is to be done with all of their assets, then an estate administrator is going to be named. If you have volunteered, or been named by the court to be the estate administrator, then you have a duty to ensure that their assets are distributed in keeping with a host of laws.
Here, we’re going to look at some of what might be involved if you’re taking up the role of an estate administrator, and some tips on how to make it easier.
Collecting an accurate record of the estate
The bulk of the work is going to be in collecting the evidence of all of the assets that belonged to the deceased. You have to take your time to create an inventory of everything in their estate, which can include all of their real estate and property, no matter where it is, all of their personal property, financial accounts, retirement policies and plans, insurance policies, loans owed, and contents of any safes or deposit of boxes. You will also have to collect an inventory of debts, loans, and taxes that they owe.
Managing the finances of the estate
As an estate manager, you do have a certain level of financial duties to manage the funds of the estate as responsibly as possible. You are likely to have to apply for a federal tax ID number of an estate and create a new bank account for the state. This account will be used to manage funds from the deceased’s checking accounts, savings accounts, life insurance proceeds without a named beneficiary, and money owed to the deceased. Any fees spent during the state administration process are to come from this account and to be recorded.
Paying off the departed’s debts
Before any of the money or assets from the individual’s assets can be passed out to their family and inheritors, you have to deal with the creditors first. Informing the creditors of their death is the first step, and after that, you have to look at whether or not there is enough money to pay them. Sometimes, you may need to sell assets from the estate to ensure that the debts are covered. Typically, if property or assets have been named inheritors, they cannot be used to pay debts. Any intestate property or assets are to be sold, however.
Collecting debts
Of course, money that is owed to the departed is part of the process as well, and you may be responsible for collecting any debts that you are able to find evidence of. You should make sure that you’re aware of any state laws that define how long debtors have to pay off the debt and, if they fail to, you may need legal assistance in getting the money from them through a lawsuit. Any debts collected are to go into the estate bank account, whether they can be distributed or used to pay off any expenses.
Managing their tax
You should have a federal tax ID number for your estate, which is used to file a range of tax returns that the departed is responsible for. This includes their final income tax returns, any state tax returns, federal estate and gift tax returns, and the estate’s income tax return. There may be tax planning services that can help you reduce the taxes owed at death, although this is typically done in life so as to not hold up the process. Any taxes to be paid are to be paid from the estate’s bank account.
Distributing the state
If there are any assets remaining after taking care of all of the financial responsibilities of the departed, then it is time to distribute the remaining assets and funds. This is to be done in accordance with a will if there is one to be found, but if not, then you have to follow intestacy law to see who is going to get what. There is a chance that someone will contest the will, and if so, you may have to defend it in probate court. However, managing the estate with the help of a lawyer may help you ensure that you’re doing things in accordance with the law.
Losing a loved one can be a demanding time for anyone, and to become an administrator of their estate is a significant burden to take on, as well. However, with the tips above, hopefully, you have a better idea of what is expected of you.