The Executor’s Song: Part 4, Getting the Estate Organized

by | May 18, 2001

Publisher’s Note: This is the fourth in a six part series of personal finance columns on the subject of being the executor of an estate. These columns are based on my own personal experiences in this regard. Individuals should consult a professional advisor and take their own circumstances into account. While my primary objective is […]

Publisher’s Note: This is the fourth in a six part series of personal finance columns on the subject of being the executor of an estate. These columns are based on my own personal experiences in this regard. Individuals should consult a professional advisor and take their own circumstances into account. While my primary objective is to show my readers how to maximize the value of the estate, I will also try to prepare my readers for the unimaginable difficulties faced by the executor.

Part 3 of this series dealt with the triage process, which involved taking quick, decisive actions to reduce ongoing expenses associated with the estate and to generate some revenue to pay off funeral bills and other expenses. Once the triage process is complete, you are ready to take a more organized approach to your duties as executor.

The first thing you should do is set up a register in Quicken to record all expenses and income associated with the extent. This will give you the ability to generate detailed reports which can be used to provide an accounting to the heirs of the estate, and to facilitate closing the estate.

The second thing you should do is to open up a checking account for the estate. You may need to acquire a taxpayer ID number to do this, although this is not always the case, and you may be able to open the account using the social security number of the deceased.

Next, you need to organize all of the deceased’s financial papers. If you are very, very lucky, the deceased kept meticulous financial records. But I think it is more likely that you will find yourself in a situation similar to mine — having a complete mess on your hands. Here is how I handled the situation.

I started going through the deceased’s papers, one by one, and making file folders. Over a period of several days, I literally covered the floor in my office with over 100 different file folders containing documents pertaining to every aspect of the deceased’s life — life insurance, health insurance, checking accounts, brokerage accounts, real estate, medical bills, credit cards, automobile, funeral, etc. As I did this, I made notes about things that were not clear to me to facilitate further investigation.

Once I had completed the process of organizing the documents, I divided the files into three groups.

The first group of files were clearly important documents that I would need to access frequently in the performance of my duties as executor. The second group of files contained information that looked to be of some importance that I might need to access occasionally. The final group contained files that in my view were very unlikely to be important. These were papers that were more historical in nature.

I took the first two categories of files and put them into a file cabinet, grouping them together into sub-categories. I put the remaining files aside so that I wouldn’t have to be constantly going through them to get to the important stuff.

It’s worth noting that some documents — very old income tax returns and cancelled checks never even made it to my office floor — I threw them out immediately. I think it’s also worth noting that this process inspired me to not leave a similar mess behind for my executor. Accordingly, as soon as I had some time, I went through my own personal files and threw out two decades worth of old income tax returns and cancelled checks.

In about a week I had everything organized. This process enabled me to become familiar with the deceased’s assets and liabilities.

Once you have organized the deceased’s documents, make copies of all checking account statements and brokerage statements and send them to the probate attorney so that the attorney can initiate action to liquidate the accounts on your behalf. (IRA’s are a special case I will discuss in the next column in this series.)

Once you get organized, it is important to stay organized. You will be receiving a large volume of the deceased’s forwarded mail. Keep up with the filing or it will overwhelm you. (An aside: it was interesting in my case to note how much of the forwarded mail was junk mail related to schemes to take financial advantage of the elderly . If you have elderly parents who might be taken in by one of these “offers”, you would do well to assist your parents in going through their mail, if this is feasible.)

Finally, I want to stress again the value of division of labor. While I was organizing documents, my wife was taking care of all of the hard physical labor associated with being an executor, as I described earlier in part 2 of this series. This allowed me to focus all of my energies on the administrative tasks associated with the estate.

The views expressed above represent those of the author and do not necessarily represent the views of the editors and publishers of Capitalism Magazine. Capitalism Magazine sometimes publishes articles we disagree with because we think the article provides information, or a contrasting point of view, that may be of value to our readers.

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