Karen B. Arthur | Posted on Feb 01, 2016
If asked to serve as the executor of the Last Will and Testament of a family member or friend, would you know what to do? The executor is generally appointed to oversee the administration of the estate, which can be both an honor and a significant responsibility.
It is very important for the executor to know where the most current Will is kept because that is the document that will be probated. "Probate" simply means the court procedure through which the Will is proven to be valid or invalid.
The executor must appear before the Register of Wills of the county in which the decedent died. He or she then presents a petition, takes an oath to fulfill his or her responsibilities, and pays filing fees. The Register of Wills then issues Letters Testamentary and Short Certificates, which are the documents under seal that evidences your legal authority to administer the estate.
The Letters Testamentary is the formal instrument of authority and appointment granted by the proper court to an executor empowering that person or corporate entity to administer the estate. A Short Certificate is a legal document that shows the decedent’s name, date of death, and the name of the executor who has been appointed to handle the administration of an estate.
Generally speaking, the executor must locate the decedent’s assets and manage them until they are distributed to the beneficiaries. It is also the job of the executor to gather the assets and have them valued as of the date of death. These values are used to calculate federal estate tax and/or Pennsylvania state inheritance tax, as applicable. Ask how to obtain a discount on the Pennsylvania Inheritance Tax Return.
Following is a checklist that is by no means all-inclusive, but incorporates various components of the estate settlement process:
- Consult with an attorney to represent the estate;
- Collect important papers such as the death certificate, insurance policies, marriage license, birth certificate, veteran discharge papers, social security number, and most recent tax returns;
- Determine if there are any safe deposit boxes;
- Inventory all assets and arrange for appraisals of real and personal property;
- Look for hidden cash in the home (such as in clothing pockets, freezers, under the mattress, in a book, or taped under a shelf);
- Transfer securities to the name of the estate and collect dividends until the securities are sold;
- Apply for benefits such as life insurance proceeds, retirement plan benefits, veteran benefits, and employee benefits;
- File final income tax returns for the decedent and file the tax return for the estate;
- Determine and pay valid claims against the estate;
- File the Pennsylvania Inheritance Tax Return and determine if a federal estate return must be filed;
- Prepare either a formal accounting or complete an Informal Family Settlement Agreement showing all receipts and disbursements made during the administration of the estate; and,
- Distribute assets to the beneficiaries after all expenses are paid.
Estate settlement can be an overwhelming process depending upon the complexities of the estate. Like other financial institutions with trust powers, the Bank often serves as executor for individuals in our community and maintains the specialized skills necessary for estate settlement.