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A Loved One Has Died, and Suddenly It’s Your Task to Settle the Estate. Now What Do You Do?

Lately we’ve shared several articles her on the AgingOptions Blog about estate planning. Earlier this year, for example, we wrote about a caregiver who had changed her aunt’s will, unbeknownst to her cousins. A few weeks before came this article about an estate planning checklist. Then there was the article in early March about why people put off writing a will.

But the truth is that estate planning is an inexhaustible topic. Sooner or later, it’s going to affect virtually every one of us, and sometimes the impact may seem to come out of the blue. In this CNBC article first published last spring, for example, reporters Stephanie Dhue and Sharon Epperson write about an all-too-common problem: a loved one has passed away, and – unexpectedly – it falls to an unprepared son, daughter, or friend to settle their estate.

What if that someone was you? You’ve never done this before, and you’re not a lawyer. Now what do you do? Where to start? Let’s see how this article guides us through the basics of the process.

Somebody Has to Handle the Paperwork

When it comes to estate planning, the semantics often get in the way. Maryland estate planning attorney Meredith Hill told CNBC, “When you hear the word ‘estate,’ you think of someone that lives in a big mansion that has a yacht and vacations in the south of France all the time. But that’s not the case; literally every single person has an estate.” 

The article makes it clear that paperwork is inevitable, and someone has to do it. “When a loved one dies, someone will have to take care of debts and distribute assets. If the deceased had property — a house or a car, for example — or financial accounts without named beneficiaries, someone will have to do the paperwork to pass it all on.”

The article uses the story of physics professor Arya Akmal to explain its point. Akmal’s father passed away in 2019, and thanks to a will that was never updated in 30 years, Akmal became the unexpected executor. “Being naïve, I figured okay, I’ll try and do this,” Akmal said. “It turned out to be a much bigger job than I expected.”

Step One: Getting Recognized as the Executor

For Akmal, a detailed process was made even more complicated by COVID-19, as the courts were shut down. (Hopefully we won’t be facing that again, but we never know.) He had to get the court to acknowledge him as executor in the place of someone designated in that outdated will – a person no longer qualified to serve.

“His first step was getting recognized as executor by the court and taking inventory of his father’s possessions,” the article states. “Experts say a simple estate with only a few assets that are easy to find may be settled in six months. However, a more complicated financial situation may take several years to resolve.”

In fact, some experts say that fulfilling your loved one’s wishes can “be like taking a second job,” and adding grief into the mix can just multiply the complexity. It’s important to understand, before taking on the executor role, that being an executor includes responsibilities that will likely require you to seek professional guidance and support.  

Step Two: Find Out if Your Loved One Had Financial Helpers

If your loved one had a financial advisor or anyone else who was helping them manage their assets, the next step would be to contact those people and ask for their input and insight.  Hopefully an adviser will know about any obscure accounts or assets your loved one may have owned. The same goes for the family lawyer, if there is one.

“Typically, a financial advisor or an attorney or an accountant, or even an insurance specialist will have some of that information,” said Valerie Galinskaya, the head of Merrill’s Center for Family Wealth. “If a family member has been proactive, hopefully the family member who is carrying out the responsibility will know that but, if they don’t, those individuals can provide a lot of helpful insight.”

Step Three: Figure Out the Executor’s Responsibilities

The trick here is that every state has its own rules and timelines for executors to follow. “While the process can be relatively straightforward with a plan in place, it’s still not easy,” the article explains.

The typical steps are as follows: first, experts say to get multiple copies of the death certificate. Then, locate the will and gather account documents. “Note that life insurance and financial accounts with named beneficiaries supersede a will,” the article warns.

Generally, “The executor’s job is to notify and stay in touch with beneficiaries and interested parties. They also are responsible for paying bills, closing accounts and taking inventory of assets. The task is time-consuming. Having a checklist and keeping detailed records can be helpful,” the article explains, and adds, “Executors also must determine if any part of the estate not included in the will must go through a court procedure called probate. The executor should not distribute assets to beneficiaries until outstanding debts and taxes have been paid.”

It’s important to enter into your role as executor knowing that this is not necessarily going to be an easy, short, or uncomplicated process. Don’t be surprised by unanticipated twists and turns.

Advance Preparation is a Gift to Your Family

“A tremendous gift that you can give to your family and friends that you leave behind is the proper planning now because it will save them money and save them time,” attorney Hill says, and that’s a message we can certainly get behind. As Rajiv Nagaich often says, no one wants to be a burden to their loved ones – but the fact is that your executor will have to take on some unavoidable and time-consuming responsibilities. The more prepared you are, the better.

As for Akmal, it’s been three years, and he’s almost finished settling the estate. Patience, as he says, is key. His advice? “Honestly, if you’re not sure what to do, it’s probably better not to do anything until you do know.” Make sure you get professional advice and don’t go it alone!

My Life, My Plan, My Way: Get Started on the Path to Retirement Success

At AgingOptions we believe the key to a secure retirement is the right retirement plan – yet statistics show that 70 percent of retirement plans fail. That’s why for nearly two decades we’ve been dedicated to the proposition that a carefully-crafted, fully comprehensive retirement plan is the best answer to virtually any contingency life may throw your way as you age.  Our slogan says it all: My Life, My Plan, My Way.

When it comes to retirement planning, most people focus on one fairly narrow issue: money. Financial planning is an important component of retirement planning. However, people heading towards retirement often make the mistake of thinking that a little financial planning is all that’s required, when in fact most financial plans are woefully inadequate. What about your medical coverage? What if you have to make a change in your housing status – will that knock your financial plan off course? Are you adequately prepared legally for the realities of retirement and estate planning? And is your family equipped to support your plans for the future as you age?

The best way we know of to successfully blend all these elements together – finance, medical, housing, legal and family – is with a LifePlan from AgingOptions. Thousands of people have discovered the power of LifePlanning and we encourage you to the same. Simply visit our website and discover a world of retirement planning resources.  Make certain your retirement planning is truly comprehensive and complete with an AgingOptions LifePlan.  Age on!

(originally reported at www.cnbc.com)

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