How to settle a loved ones estate

Published 3:24 pm Friday, August 13, 2010

Dear Savvy Senior,

My 77-year-old aunt recently asked me to be the executor of her estate when she dies. I feel flattered that she asked, but Im not sure what the job entails. What can you tell me, and where can I get some help?

Honored but Clueless

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Dear Clueless,

Serving as the executor of your aunts estate may seem like an honor, but its also a big chore. Heres what you should know to help you prepare for the job.

Understand the Duties

As the executor of your aunts estate, youre essentially responsible for winding up her earthly affairs after she dies. While this may sound simple enough, you need to be aware that the job can be tedious, time consuming and difficult depending on the complexity of her financial and family situation. Heres a rundown of some of the different duties youll be responsible for.

&bsp;&bsp; &bsp;Locate her will and compile an inventory of everything in her estate: real estate, cars, stocks, bonds, mutual funds, IRAs, bank accounts, insurance policies, etc. &bsp;

&bsp;&bsp; &bsp;Apply to appear before probate court.

&bsp;&bsp; &bsp;Notify the beneficiaries named in her will.

&bsp;&bsp; &bsp;Handle day-to-day details like terminating her leases, credit cards, magazine subscriptions and notifying banks and government agencies such as Social Security and the post office of her death.

&bsp;&bsp; &bsp;Set up a checking account in the name of the estate which youll use to pay expenses like utility bills, mortgage payments, homeowners insurance, funeral expenses, taxes, legal fees, etc. &bsp;

&bsp;&bsp; &bsp;Prepare and file final income tax returns.

&bsp;&bsp; &bsp;Distribute assets to the beneficiaries named in her will.

Get Organized

If you agree to take on the responsibility of your aunts estate, your first step is to meet with her and make sure she has an updated will, and find out where all her important documents and financial information is located. Being able to quickly put your hands on deeds, brokerage statements and insurance policies after she dies will save you a lot of time and hassle.

Get Help

If your aunt has a complex estate, consider hiring an attorney or tax account to guide you through the process, with the estate picking up the cost. Find out if your aunt uses anyone in particular for legal or tax advice. If so, get their names and contact information. Once she dies, you can use them or hire someone else. Whoever you choose, make sure they have experience dealing with estates. If you need help locating a pro, the National Academy of Elder Law Attorneys (, and the National Association of Estate Planners and Councils ( are good resources to help you search.

Diffuse Family Problems

If your aunt has kids, find out if there are any conflicts brewing between them or any of her other beneficiaries. If there are some potential problems, you can make your job as executor much easier if everyone knows in advance whos getting what, and why. So ask your aunt to tell her beneficiaries what they can expect. This includes the personal items too, because wills often leave it up to the executor to dole out heirlooms. If theres no distribution plan for personal property, suggest she make one and put it in writing.

Fee or Free

As the executor, youre entitled to a fee paid by the estate. State law determines the amount, which can range anywhere from 1 to 5 percent depending on the size of the estate. But, if youre also a beneficiary, it may make sense for you to forgo the fee. Thats because its taxable income, while Uncle Sam and most states doesnt tax inheritances. (To find the inheritance tax law in your aunts state, see

Savvy Tip: For more help, Nolo (; 800-728-3555) offers an excellent resource book called The Executors Guide: Settling A Loved Ones Estate or Trust ($30), which gives step-by-step advice on how to settle an estate.

Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit

Jim Miller is a contributor to the NBC Today show and author of The Savvy Senior book.