Being named an executor of a will[1] is a serious responsibility, but most people who are selected know nothing about how to perform the role.
An executor's job is to handle the estate[2] of a deceased person, says Sandra Price, a San Francisco-based tax and estate planning partner at Sideman and Bancroft, who specializes in post-death administration.
"When someone comes into my office fresh, not knowing what to do, I usually tell them that all they have to do is identify the assets and value them, pay the debts, and then distribute the assets according to the will. During the period, they need to make sure the assets are protected," she says. "Then I say, my emphasis is that's 'all' they have to do. But the devil is in the details."
Here are four facts to know about the role of an executor of an estate.
An executor is a fiduciary. "A fiduciary is a fancy word for the person who's liable if they don't do it right," says Mark Accettura, elder law attorney with Accettura and Hurwitz in Farmington Hills, Michigan, and the author of "Blood and Money: Why Families Fight Over Inheritance and What To About It."
That means the person who is named must follow the wishes[4] of what's been written in the will. "If they are going to deviate from that in any way, they have to get court approval," Accettura says.
You may have to get help. In some states, like Texas, an executor must have an attorney except for limited circumstances, says Robert J. McGuire, probate and estate planning[5] attorney at Godwin PC in Dallas.
"You're not really representing yourself as an executor," McGuire says. "You're really representing other heirs most likely, or you also have some duty to creditors."
Wills often go through probate, which means going to court, so an attorney can guide the executor through the process. Price says people who want to research the details of estate law in advance of meeting a lawyer can visit websites like Nolo.com, which has information on various aspects of law. But it's important that executors obtain information that is state-specific since laws governing wills vary.
Having an attorney also helps if there is any contention, such as someone who might claim to have a newer version of a will, or argues that the person named executor is incapable of the task.
If the estate is large, the executor may also want to speak to other professionals – accountants to help with the deceased's final tax return, a real estate broker to sell property, or someone who specializes in collectibles – to help the process go smoothly, Price says.
All of the professionals are paid from proceeds from the estate.
Secure the estate as soon as possible. That means being proactive with things like changing the locks on a house and gathering the keys to all vehicles.
"If someone is driving the car, it exposes the estate to liability," Accettura says.
This also means informing heirs and creditors quickly, too. For creditors, Accettura says executors need to create a legal notice to creditors, which is published locally. The notice alerts creditors who have loaned money to the deceased person that the creditor has a limited time to make a claim, otherwise it's barred.
McGuire says take time when dealing with creditors.
"You don't want to pay those claims until they have been properly authenticated," he says. "There might be other things that apply like statute of limitations, but otherwise you put the burden of proof on the creditor. You can always negotiate claims with creditors, even after you've determined them to be valid. You want to play hardball with the creditors, because you owe more a duty to the heirs than to creditors."
Communicate with beneficiaries. All three experts say it's important to talk to beneficiaries[7] so they are aware of the process, which can take at least six months or more.
"Heirs want to know when they get distributions. They only get their distributions when an executor has made that determination that the proper debt have been paid," McGuire says.
However, they all say that partial distribution of the estate may satisfy heirs while the estate is being settled. That can include passing out small, tangible items like favorite pieces of furniture or jewelry than do not need to have a separate appraisal.
"The tangible items can be distributed easily and quickly, and a lot of times it's driven by the economy – if it's an apartment that's rented, you need to vacate the apartment," Price says. "Sometimes there are other factors that are driving the promptness."
Executors who make partial distributions to heirs first need to make sure there's plenty of assets[8] left to pay creditors.
"If executors over-distribute, they may be personally on the hook. Once the assets are distributed, the beneficiaries don't have to give back the assets" if a creditor needs to be paid, Price says.
When distributing assets, executors must not get intimidated by others.
"As a fiduciary, you want to be transparent and communicate with the beneficiaries, but on the other hand, it's not a democratic process. You are in charge," Accettura says. "Other family members, if they become intrusive and you don't push them back somewhat, you lose control of the process, and the next thing you know you have bedlam."
Executors need to document everything they do regarding the will, which also helps in disputes.
"If you maintain good records, we'll always be able to defend you. If anyone complains, we'll be in a position to defend you, unless you've done the cardinal sin and benefiting yourself over others, because you're a fiduciary," McGuire says. "You don't get the best choice, even if you're an heir. You have to take others' considerations ahead of yours."
Conventional to the sensational.
When it comes to the question of how to find money to invest – or simply, how to find money – it usually goes something like this: Either you scratch your head or bang it against a wall of clichés. (Drink less Starbucks coffee! Bring a bag lunch to work! Get a second job!) Those strategies can and do work for some, but they're not much fun. From the conventional to the sensational, these eight methods have proven track records for generating income[10], from the hundreds to the millions of dollars.
Easiest catch: Employer match.[11]
Easiest catch: Employer match.
No one would turn down free money in theory, especially with compound interest. But that's exactly what most folks do when they drop the ball on matching retirement funds[12] when an employer offers them. "A typical matching situation would be matching 50 percent of employee contributions for the first 6 percent of salary that an employee contributes," Dirk Quayle, founder, president and board member of NextCapital, a digital-advice firm based in Chicago. "But many companies also offer a straight match of 100 percent up to a certain percentage."
Taking stock of taking stock.[13]
Taking stock of taking stock.
Your money can produce immediate returns through an employee stock purchase plan. The ESPP typically works by payroll deduction, with the money[14] converted into shares every six months at a 15 percent discount. "If you immediately liquidate those shares every time they're delivered, it's like getting a guaranteed 15 percent rate of return," says Dave Yeske, managing director at Yeske Buie and director of the financial planning program at Golden Gate University in San Francisco. To make it grow again: "Add the after-tax proceeds to your supplemental retirement savings."
When zero percent means profit.[15]
When zero percent means profit.
This is not for those enamored of credit cards as fine instruments of retail therapy. So long as interest rates remain low, zero percent credit card offers will keep landing in mailboxes of people with healthy credit scores. Let's assume you can write yourself a credit line check for $10,000 – which creates a $10,300 balance with a 3 percent fee. If your investment returns 10 percent annually, the 18-month offer could net you $1,200. While you might want to spend the proceeds at Amazon.com (ticker: AMZN[16]), buy company stock instead.
Here comes the sun.[17]
Here comes the sun.
"On average, a homeowner is likely to spend over $30,000 on electricity over the next 20 years," says Vikram Aggarwal, CEO and founder of Energysage, an online solar energy[18] marketplace. "Installing solar panels significantly reduces or can even eliminate those electricity costs. This frees up capital for you to invest elsewhere, such as reinvesting the savings at regular installments back into the market." Some states allow homeowners to "sell" their energy back to a utility through solar renewable energy certificates, which can net as much as $2,500 a year.
The garage sale.[19]
The garage sale.
Go ahead and laugh, as long as it's all the way to the investment bank. Statistic Brain reports garage sales[20] generate about $4.2 million in weekly revenue. In-demand items include old wood furniture, tools, vinyl records and musical instruments. In the span of a day or two, you can sell what you no longer need and use the money for whatever you want – which in this case is a piece of the action on Wall Street. Whether you turn your household junk into junk bonds is up to you.
Make life less taxing.[21]
Make life less taxing.
Technically, this is a "financial investment," as a quality CPA costs more to hire. But they're also more thorough, and for those in the exploding freelance economy, it's a must to have an ace accountant who can claim every possible deduction[22] the law will allow. So if you pay her $500 but she gets you an extra $1,000 in refunds from the year before, you've just snagged $500 without so much as lifting a pinky. And under special circumstances, the CPA's fee is tax deductible, as well.
When sitting back pays back.[23]
When sitting back pays back.
Sound investments represent the ultimate source of passive income, so it makes sense to collect money in ways that run on autopilot. In the digital economy, many of the best sources stem from repeated uses of the same slice of content. "Photographers, for example, can make 25 cents every time someone downloads their photographs from Shutterstock," says Kevin Gallegos, vice president of Phoenix operations for Freedom Financial Network.
YouTube gaming host.[24]
YouTube gaming host.
When it comes to great business ideas, the ones that sound the most outlandish often hide the biggest storehouse of golden eggs. Many of the biggest moneymakers on YouTube are young hosts with minimal production equipment who earn seven-figure sums just for doing what they'd do regardless: gab about video games. According to New Media Rock Stars, YouTube gamers making an annual killing include JackSepticEye ($6.8 million), StampyLonghead ($6 million), Markilplier ($7.1 million) and the arguable King of the YouTube hill, Pewdiepie ($12.7 million).
Read More[25]References
- ^ a will (money.usnews.com)
- ^ the estate (money.usnews.com)
- ^ 10 Ways You Can Throw Retail Stocks in Your Chart (money.usne ws.com)
- ^ follow the wishes (money.usnews.com)
- ^ probate and estate planning (money.usnews.com)
- ^ 13 Money Hacks to Turbocharge Your Investments (money.usnews.com)
- < small>^ beneficiaries (money.usnews.com)
- ^ assets (money.usnews.com)
- ^ 6 Tips to Invest Like a Venture Capitalist (money.usnews.com)
- ^ generating income (money.usnews.com)
- ^ Easiest catch: Employer match. (money.usnews.com)
- ^ retirement funds (money.usnews.com)
- ^ Taking stock of taking stock. (money.usnews.com)
- ^ money (www.usnews.com)
- ^ When zero percent means profit. (money.usnews.com)
- ^ AMZN (money.usnews.com)
- ^ Here comes the sun. (money.usnews.com)
- ^ solar energy (money.usnews.com)
- ^ The garage sale. (money.usnews.com)
- ^ garage sales (money.usnews.com)
- ^ Make life less taxing. (money.usnews.com)
- ^ every possible deduction (money.usnews.com)
- ^ When sitting back pays back. (money.usnews.com)
- ^ YouTube gaming host. (money.usnews.com)
- ^ Read More (money.usnews.com)
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