The role and responsibilities of an executor

The role and
responsibilities
of an executor
Navigating the challenges
of estate administration
The role and responsibilities of an executor: Navigating the challenges of estate administration
An honor that brings unique challenges
Being named executor by a loved one is both an honor and a privilege. Yet serving as executor can prove
to be a highly complex role—one that comes with significant emotional and personal financial costs. The
responsibilities in this capacity are extensive and often highly technical. And the commitment of time and
emotional energy can be daunting, often with estate administration taking 18 months or more to complete.
As executor, an individual must undertake a wide array
of duties and challenges that include:
• R
eviewing the Will and associated trust documents, and
adhering to their terms;
• Identifying, collecting and valuing all estate assets;
• D
etermining and satisfying the decedent’s final debts
and expenses;
• D
eveloping a coordinated and impartial post-mortem plan
for the estate;
• P
reparing and filing all necessary income, estate, gift and
generation-skipping tax returns in a timely fashion;
• And preparing all necessary court-mandated filings.
In addition, executors make decisions regarding taxes, investments
and distributions from the estate—and are required to document
each decision. And the financial liability for errors, omissions or
inappropriate tax elections made while serving as executor, may
be substantial.
But perhaps most challenging, while undertaking these various
responsibilities, an executor is often required to make sensitive
decisions that balance the competing interests of multiple
beneficiaries, or even possibly refuse requests by individuals
who may be close friends or family members.
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How Merrill Lynch Trust Company can simplify
an executor’s role
Typically, an executor has the right to appoint an agent to
assist in fulfilling the complex requirements associated with
his or her duties. Appointing Merrill Lynch Trust Company1
(MLTC) to serve as agent can help to simplify the executor’s
role, while ensuring that the objectives and requirements of
the estate are met precisely and effectively.
We take an inclusive approach to estate settlement by
facilitating open communication among all the parties
involved. These may include the estate’s accountant, the
attorney, the estate beneficiaries or other representatives.
And our relationships can be tailored to reflect the specific
needs and interests of each individual and situation. For
example, we may provide administrative support while an
accountant prepares the tax returns. Or in many instances,
we serve as a Corporate Executor, assuming complete
fiduciary oversight of the estate.
MLTC is a leading provider of trust and estate services
nationwide. Our dedicated Estate Administration Group
is focused exclusively on estate and trust settlement and
can streamline the administration process by providing
comprehensive and timely assistance, offering impartial
fiduciary advice, and helping to resolve any estate-related
conflicts among family members or beneficiaries.
Navigating the estate settlement process
For those chosen to serve as executor of an estate, it is critical
to understand the process and responsibilities associated
with estate settlement. The timeline on the following pages
is designed to provide an overview of the executor duties, but
keep in mind you should consult with an attorney to discuss
how this information applies to your particular situation.
1
Merrill Lynch Trust Company is a division of Bank of America, N.A.
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Let Merrill Lynch
Trust Company help.
We can:
• Coordinate the probate
proceedings with the estate’s
attorney, and assist with
proving and defending
the Will
• Conduct the collection of
assets and provide valuations
for marketable securities,
arrange appraisals for
personal and real property,
and evaluate closely held
business interests and
special assets
• Manage real property
until sold, and determine
community property
divisions as required
• Review and pay bills, cancel
all subscriptions, services and
utilities as needed, arrange for
creditor notice and receive and
pay all proper claims
• Prepare the asset inventory
and any required court
accountings
PREPARATION
Immediately – Review the Will and begin the estate settlement process
R
eview the Will and note any special instructions
C
onfer with attorney who will represent the estate
M
eet with family members and other interested parties to discuss document
provisions and settlement process
First 30 Days – Arrange for probate of the Will and information changes
R
eceive court authority to act and notify banks, Financial Advisors and others of
your appointment
B
egin to identify outside assets and liabilities and send notices to creditors
N
otify Post Office as to where decedent’s mail should be forwarded, and contact
utility providers to change billing information
30 to 90 Days – Assemble, inventory and take custody of assets
S
earch for and collect all outside assets (e.g., savings, checking and investment
accounts, individual securities, safe deposit boxes)
Inspect all real estate and personal property. Review leases and mortgages and
associated insurance policies
File claims for any veterans, Social Security, retirement or life insurance benefits
that are due
R
eview any employment contracts or deferred compensation arrangements to
determine whether or not payments are due to the estate
A
ssemble supporting data and establish value of all assets in the estate by having
assets appraised by a qualified appraiser
30 to 120 Days – Review financial records
O
btain all cancelled checks and brokerage records for several years prior
to death
A
cquire information on insurance policies on decedent’s life owned by others, as
well as policies owned by decedent on others
Identify and review all significant gifts made by the decedent during life
R
eview with preparer the decedent’s personal and business tax returns for the
three years prior to death, and gather data to support returns if audited
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SETTLEMENT
1st to 24th Month – Administer the estate
C
ollect all income, receivables and other moneys due, keeping detailed records
D
etermine distribution requirements of spouse or beneficiaries and whether any
discretionary distributions are required during settlement
R
eview all claims, bills and expenses submitted against the estate
A
rrange for and oversee delivery or sale of tangible property and real estate
C
oordinate any litigation against decedent or estate
E
stimate cash needed for bequests, taxes and settlement costs and determine
assets to be sold
E
xecute and file all required probate court pleadings through attorney
1st to 15th Month – Prepare and file tax returns
Let Merrill Lynch
Trust Company help.
We can:
• P repare all necessary
court accountings
• Arrange for the payment of
all expenses and bequests,
help prepare the post-mortem
tax plan, calculate cash
requirements for all taxes,
claims and legacies, as well
as advise on assets to be
distributed in-kind for bequests
and trust funding
• Prepare and file all fiduciary
F
ile decedent’s final individual income tax returns
F
ile fiduciary income tax returns for the estate during the administration period
F
ile estate tax return (or extension) and pay estate tax within nine months
of death
C
onsider estate tax impact of non-probate assets (e.g., jointly-owned property
with right of survivorship, any trusts created or gifts made)
D
etermine whether any demands should be made against persons who received
property outside of the Will for their proportionate share of taxes
12th to 24th Month – Distribution of estate
P
repare data for final accounting showing all assets, income and disbursements
D
istribute the estate in accordance with the Will
R
eceive receipts and releases from beneficiaries, and if required, notice of
discharge from the court
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income tax returns and any
information reporting
required by law, along with
any tax returns required
by other states for real and
tangible personal property
• D
etermine the most
appropriate distribution
formula based on the terms of
the Will, while maintaining
a reserve to cover remaining
expenses and obligations
Why choose MLTC as agent or executor?
Being named as the executor of an estate serves as a sign of the
decedent’s deep trust and respect for your sound judgment. Let
Merrill Lynch Trust Company assist you in ensuring that you can
confidently rise to the challenge. As your agent we can provide
the estate administration experience and guidance, fiduciary
strength and professional impartiality to alleviate many of the
extensive responsibilities, as well as help to resolve any issues or
disputes that may arise.
And for those who are considering naming a Corporate
Executor for their estate, by choosing MLTC, you can rest
assured that your wishes will be carried out by an experienced
team of estate specialists who understand the important
fiduciary responsibilities associated with estate administration
and settlement.
With your Financial Advisor’s guidance, you can harness the
combined intellectual capital and nationwide focus of Merrill
Lynch Trust Company’s seasoned trust and estate administration
professionals, all of whom work to diligently support your
unique needs.
To find out how you can take advantage of Merrill Lynch Trust
Company’s dedicated Estate Administration Group, contact your
Merrill Lynch Financial Advisor.
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intended as tax advice and should not be relied upon for the purpose of avoiding any tax penalties. Neither Merrill Lynch
nor its Financial Advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions
or arrangements that may have tax, accounting or legal implications with their personal professional advisors.
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and investment advisory services, including the type of advice and assistance provided, the fees charged, and the rights and obligations of the parties. It is important to
understand the differences, particularly when determining a service or services to select.
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