Estate Administration: 6 Steps Required by an Executor
Once the executor or administrator is appointed by the court, the estate administration process begins. There are a number of steps required of the executor.
- Assemble and gain control over the assets to ensure that all assets have been accounted for and have been sufficiently safeguarded.
- Inventory the assets for the court.
- Make decisions regarding liquidating or selling assets and determine the appropriate course of action. The executor's primary role is to protect and conserve the assets for the beneficiaries of the estate.
- Creditor claims must be ascertained and disposed of before beneficiaries receive any payments. If the executor distributes assets to pay all the creditors, then the executor will be personally liable for any shortfall to the extend assets were distributed to the beneficiaries.
- Tax filings must be made on a timely basis. This includes not just the decedent's final personal income tax returns, but also income and death tax returns for the estate.
- File an accounting with the court showing all of the activity for the estate including income, proceeds from the sale of assets, payments for debts and expenses, and finally distributions to beneficiaries. Such an accounting is subject to court approval.
For the most part, the probate process can take up to a year for a simple and modest estate and can take more than a year for a more complex and substantial one. Of course, family and beneficiary issues can impact the time necessary to settle a probate estate. It is prudent to obtain competent legal counsel even for a more modest estate.
The probate process is a public proceeding meaning both the contents of the estate plan and the assets are a matter of public record. It can be more costly and time-consuming than other methods of settlement.
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