M asks:
I would appreciate any coverage regarding being the executor of an estate. My parents have appointed me the executor of their estate when the time comes, and I am willing and able to do so. I am also the executor for my three sisters’ estates. Again, I am willing and able.
That said, I would like to know more about how to prepare for that role in advance and what may be useful to know. My family and I are close, and my parents especially are well prepared (my father has what he calls his “death book” with information and instructions), but I know I don’t know all there is to navigate. Maybe this would be of interest to others as well?
It’s wonderful that you are willing and able to take on the work of being the executor of your parents’ and siblings’ estates. This can often entail months of back and forth with lawyers, financial institutions, and family members, and when you’re doing so in addition to your own day job and family responsibilities, it’s no easy feat.
“It’s a tremendous amount of work, and it’s a tremendous amount of work that you're being asked to do at a time of profound grief,” says Kate Phelan, regional director of wealth planning and trust advisory at U.S. Bank. Parents “think that they’re bestowing some great honor on [their children], and really what they’re bestowing is a bit of a hornet’s nest.”
In preparation, Phelan advises doing anything you can do to make the business side of managing the estate easier. That means understanding the full scope of it—what accounts are held where and how much they hold—and ensuring your parents are being forthright with all of their assets and liabilities.
That can be an uncomfortable conversation if you’re not used to talking about money with your folks. In that case, it can be helpful to bring in a neutral third party to facilitate it. That could be a professional your parents are working with (a lawyer or financial advisor) or someone new you find together.
Immediately after your parents die, you will need to file your parents’ original will and death certificate with the probate court. You will receive a letter of testamentary, which recognizes you as the executor and grants you the legal authority to manage your parents’ assets. Make sure to order extra certified copies of the death certificate, which will be needed to complete a variety of tasks related to settling the estate.
Also, be sure to lock up their physical properties (scammers are always on the lookout for easy targets and track obituaries) as well as secure jewelry, art, and other valuables.
Tracking what you’re doing and when and keeping a written record of it can help you throughout the process: Take notes on who you speak with, the time and date you contact companies or people, and what you discussed. Keep copies of everything you can so that you have a paper trail.
And if you’re up for it, you can share periodic updates with your siblings via email or a shared Google doc so they understand where you are in the process. Of course, that might elicit commentary you may not want to respond to. But offering transparency can also keep them from growing disgruntled.
Get everyone on the same page
Outside of those basics, Phelan notes the hardest part of settling any estate is managing the family dynamics. Everyone will be operating under grief, and their expectations might not match up with reality. The process to settle an estate almost always takes longer than is portrayed in the movies—it can take anywhere from three months to two years, depending on any number of factors, Phelan notes.
“There’s always going to be some kind of snag, where one of the banks is difficult, or one of the beneficiaries is being a pain in the rear, or the person who’s in charge is just on the bathroom floor, debilitated with grief,” says Phelan. “Level set your expectations now—double the time that you think it will take.”
There can be a lot of pressure on the executor, who will be fielding concerns and complaints while dealing with their own grief—not to mention all of the work that comes with the job.
If your parents and siblings are up for it, Phelan recommends having everyone sit down to understand what the executor’s duties will be and what that means for everyone else who isn’t the executor.
“Read the document, sit down potentially with the estate planning attorney, and understand how much control [the executor] is going to have,” says Phelan. “Is she going to be making financial decisions for her sisters for the rest of their lives? Is she only going to be in charge of the money until the estate is settled, which is usually nine to 24 months after a death? Those are two different things.”
This gives the other siblings a chance to explain how they feel about the arrangement and, ideally, get ahead of awkward or even contentious feelings.
Phelan recommends asking family how they feel about the set up. “The more that you can get out on the table while mom and dad are still alive, the better, because that way she's addressing head on both the work that she’s going to have to do, but also some of the emotions that she’s going to have to navigate,” says Phelan.
Remember to be kind and patient with all involved. Talking about money, family heirlooms, and legacy can be uncomfortable and is always filled with more emotions than one might expect. Hopefully your family members can acknowledge that and have faith that everyone is making the best decisions they can.
Broadly speaking, members of the Silent Generation and Baby Boomers did not grow up talking about money or enjoying the same level of transparency and openness about finances that many do now. (Websites like The Purse certainly didn’t exist when they were growing up!) It might take a few tries before your parents are willing to discuss their estate in depth.
“Clients always get hung up on telling their kids how much money they have. But it’s not about that. It’s about just letting them know what your wishes are,” says Phelan. “You need to get that message across to your kids.”
If your parents have especially sentimental belongings or heirlooms that they intend to pass down—say antique furniture, wedding rings, photo albums, etc.—discussing who will inherit those ahead of their deaths is likely a good idea. You don’t want to give one sibling unequal influence over those family treasures. Then, make sure your parents add those bequeathals to their wills.
Have the information at hand
To make the settlement process as smooth as possible, having a “death book” is a great start. For those who aren’t familiar, estate planning attorneys recommend having a compilation of all the financial and estate documents in one place that the executor has access to, as well as another physical copy someplace else. Many people keep them in fireproof safes or lockboxes.
If you are asked to be an executor, ask your parent to put together the following in an accessible (and permanent) place:
- Lawyer’s name and contact information, if applicable
- Wealth manager/accountant’s name and contact information, if applicable
- List of all of their financial accounts, such as checking, savings, retirement, pension, brokerage, etc. You will want to know what institutions they are held at and the account numbers, plus their logins and passwords for all of the accounts.
- List of all other assets, such as business interests, cars, art, family heirlooms, insurance, etc.
- List of all bills, including credit cards, electric, mortgage, car, etc.
- List of all beneficiaries attached to accounts (these take precedence over whoever is listed in the will in most cases, if they differ)
- List of all medications and doctors
- Copies of will and trust documents, if applicable
- Copies of deeds and titles (house, car)
- Copies of recent tax filing documents
- Copies of durable power of attorney and healthcare power of attorney, if applicable
- Social Security numbers
- Keys to the house, car, safety deposit box, etc.
- Login and password information for email and social media accounts, or other online accounts, if applicable
- Password for cellphone
Having all of this information in one physical place is especially important in our digital age, when many people no longer receive paper statements from their financial institutions.
Phelan recommends sitting down with your parents and the “death book” and reviewing it together. Make sure to go over the names of all the important people together (wealth manager, lawyer, etc.), and maybe even set up a time to meet with them, too. An estate lawyer can help your parents include all of the necessary documentation.
One other consideration: After one parent dies, consider being added to the bank accounts with your remaining parent. This will streamline your access to the accounts, if your parents are comfortable with it.
Consider your role
As Phelan notes, the estate settling process can be long and complicated. And even if you have a handle on your loved one’s assets and liabilities, many surprises are sure to pop up along the way.
For example, complex business, investment, or tax arrangements may necessitate getting a professional involved who can make sure you’re handling all of the paperwork properly.
With all of that in mind, some executors—even family members who act as executors—receive payment for their work. This is something you’ll want to discuss and come to an agreement with your parents and siblings before the process begins. Be sure to track any expenses you incur in your role, so that you can share them with family members if you plan to be reimbursed:
- Gas mileage and parking fees to handle tasks
- Hours per week you worked on tasks for the estate
- Fees related to filing or mailing paperwork
- Fees related to settling accounts or paying backtaxes
- Time spent cleaning the house or organizing paperwork
And if you don’t consider it worth doing without payment, you may want to reconsider your role. If it feels like too much work, it is possible to hire a professional to serve as executor of your parents’ and sisters’ estates.
Remember: Even the best laid plans can go awry, and there’s no shortage of stories about families falling out over money. While you are ready, willing, and able to be the executor, consider if it is worth the possible issues and tension that may arise with family and friends. After discussing it, your family may come to the conclusion that it’s best to have a neutral third party lead the efforts.
