{Read in 6 minutes} Whenever someone writes a Will, they face a lot of important decisions. First, they need to make a decision about whether they’re going to hire an attorney to do it, or if they’re going to do it themselves. They also need to decide who the beneficiaries are and perhaps make special provisions for beneficiaries who are minors (such as setting up Trust for the benefit of minors), disabled, or pets.
However, one of the most important decisions a person makes is naming their Executor. I previously wrote about some things to consider when selecting an Executor, but this advice is for the person writing the Will, not for the Executor. Sometimes people forget to mention to their Executor that they have named them, which comes as a surprise after the person dies. What if the Executor is in a position where they need to identify assets, liabilities, and other fundamental building blocks needed to do their jobs? In this article, I thought I’d spend a little time talking about:
– Things that people who write Wills can do to make their Executor’s life easier.
– What tools an Executor has available when the person who wrote the Will didn’t leave them much information.
Duties of an Executor
Any person who writes a Will makes a very important choice in naming an Executor. However, if they want to help their Executor, they can leave them some valuable information. Here are some common things that clients might wish to tell their Executor:
Provide Asset Information
Your Executor is going to need to close your accounts, so, it is tremendously helpful if they know where your accounts are. Nowadays, people do much of their banking electronically and forego paper statements, which means your Executor may not have the option to simply wait and see what account statements show up in the mail.
Depending on a person’s comfort level, they may wish to give their Executor a list of assets. The list could be anything from very detailed with account numbers, to a simple list of banks and brokerages where the assets are kept.
Grant Access to Online Accounts
If there is important information that a person has stored online, giving the Executor access can be extremely helpful. For example, there may be bank accounts that exist exclusively online. The Executor would not know how much is in those accounts, without login information.
Also, perhaps a person owns a company and all of their corporate records, or the past several years worth of income tax returns, are on a cloud-based system such as Dropbox or Google Drive. The Executor will need this information, and having a password manager can make things a lot easier.
Income Tax Information
If the deceased filed annual income tax returns, the Executor will need to contact their accountant. The accountant will not only be able to provide a list of accounts, but will also be able to advise the Executor about their obligation to pay potential income tax or estate tax.
On the flip side, let’s say that you’re an Executor, and the deceased did not share a lot of this information with you. You are incredibly flattered that they thought so highly of you as to name you Executor, however, you don’t know which stones to even begin turning over in order to find the most fundamental information necessary to do your job. Here are some potential resources:
The Attorney Who Wrote the Will
The attorney who wrote the Will likely has some information concerning the assets of an estate. Why? Because when attorneys meet with their clients to write Wills, it is very common for them to identify assets and next of kin (identifying next of kin can be very important for purposes of filing a probate petition).
Since the original Will will be necessary, the attorney who wrote the Will may have custody of the original or know who does. The Executor will need the original document to file with the Court.
The Executor should very quickly find and sift through the deceased’s mail. By doing this, the Executor may get a sense of what assets and accounts are out there.
Executors very commonly change the deceased’s address to their own, so that they can get the mail on an ongoing basis. Many accounts produce statements quarterly or monthly. And, even those that don’t, will likely issue tax documents every February.
The IRS
Lo and behold, the IRS is not always something to be feared. The Internal Revenue Service has copies of past tax returns and also past annual tax statements, like W-2s and 1099s. This can be incredibly helpful to an Executor in preparing future income tax returns and locating assets. Executors can have certain professionals (most accountants and some attorneys) contact the IRS to get transcripts of tax returns and past tax documents.
If the deceased did not have an accountant and did their own income tax returns (either with a pencil and paper or with an online program, etc), these can contain a wealth of information.
So, the takeaway from this article is that people who write Wills are best served by giving their Executors information, particularly if their Executors don’t already have access or knowledge of this information themselves.
If an Executor comes into the office with little to no information about assets and liabilities, however, all is not lost. Some clever sleuthing will make them a very efficient Executor … or as I call them here, a “Detect-utor.”
For more information on this topic, please contact me here.