I would love to know about the experiences of others who have performed the duties of executor for their parents or other family members. I have just one sibling, and she has mental health issues and cannot be relied on to help with anything. She also lives across the country.
When my cousin was trustee for my aunt, he showed me the list his attorney gave him and it was probably twice as long as the one I got from mine. These attorneys all have their ways of doing things.
Sorry for your loss.My thoughts and prayers are with you during this difficult time. May you find peace with your memories of your mother.
First, the attorney will likely give you a list of things you need to do. If there's a decent amount of money involved, a CPA is far more important than an attorney. The attorney will cost you a fortune, and there's not a lot of financial advice he can really give you. Try to have a list of questions for the lawyer, because every phone call or email will co$t you a lot of money.
When my dad died, The list of things to do included:
1. Locate original documents
2. Notify Social Security and Pension administration (The mortuary usually notifies SS, so you don't need to do that. A pension wasn't an issue for me.)
3. Get death certificates. (Again, the mortuary usually orders those. I was talked into ordering a dozen for my dad and used exactly one. Everyone who wants one, like banks and other institutions, is perfectly happy to get a copy and give the original back.)
4. File last will with the county clerk within 30 days. (I did this with my dad's will and paid $50 for the pleasure of Los Angeles County to have a copy of the will. I did not do it with my mother's will. Neither will specified anything other than "I leave everything to my spouse, and if they're gone, to my kids." No one is contesting wills in this family, so I'm not wasting the money a second time.)
5. Open trust accounts. (My folks already had all their money in trust accounts, so not an issue.)
6. Get an EIN (Employer Identification Number). The trust has to have its own tax ID number. If your folks already were filing taxes for the trust, then it already has an EIN. Find their taxes and check. The EIN is what would be the SS number on your personal taxes, but it wouldn't be a SS#. The CPA is a better person to assist with understanding this, but you can also get an EIN on your own through the IRS website. You'll be paying the CPA if he does it.
7. Certification of Trust -- don't know what it is, and I never did it. The world continues to turn, so I guess it's OK.
8. Safekeeping for assets and insurance -- in other words, make sure the house and anything in the trust (money, jewelry, insurance payouts) aren't available for pilfering by those who shouldn't have it. Know where the assets are.
9. Notice and document copies to beneficiaries. My brother and I are the only beneficiaries, and we get along just fine, so I didn't go all legal on him with this sort of thing.
10. Close safe deposit box -- not an issue for us. The box had been closed years before. However, the bank will require a copy of the death certificate and the trust before they'll let you access the box and its contents. Bring an original death certificate -- make them make the copy.
11. Inventory all assets as of date of death -- I started this to a ridiculous level of detail, then stopped. My brother knows I'm not going to steal from him, and we're on the same page in terms of letting each other decide who wants what.
12. Value of securities as of date of death -- Now we're getting into the nitty-gritty. If your mother had money in anything like a Schwab or Fidelity account with stocks and the like, ask them to determine the value of the portfolio as of the date of her death. They shouldn't charge you for this -- a CPA will. This will become YOUR cost basis when you inherit these securities. In other words, that value will be the starting point value for you as though you bought them at that price. This will result in a HUGE tax savings if any of those stocks have appreciated since your mother bought them. This will also apply regarding the house if there is one to sell.
I'm about to run out of characters, so I'll continue this on another post --
14. Value of real property as of date of death -- Ugh. This one was costly, but it had to be done. I had to get a forensic appraisal of my parents' house as of the date my dad died. I hired a real estate appraiser recommended by the attorney, and he looked up what similar houses sold for in the area as close to the date of death as possible. That value (like the securities -- see #12) is the new cost basis at which you have inherited the house. Instead of paying taxes on the difference between what your mom paid for that house and what you sell it for, you'll pay taxes on the difference between this new cost basis and what you sell it for. If you sell the house within about the next six months, your capital gains taxes will likely be minimal. In my case, my parents bought their house in 1969 for $45,500, and it's now worth $2.4 million (it's California -- what can I say?). Since my mother only died in July this year, my cost basis is $2.4 million, so if my brother and I sell it for $2.5 or so (again, it's California, so it could happen), we'd only owe taxes on the $100,000 profit instead of the $2,354,500 profit from what our parents paid. Phew!
That appraisal cost me (the trust really) $750. The attorney said I didn't need to do one a second time after my mother died. I'm taking his word for it.
15. Value of life insurance benefits as of date of death. Again, not an issue for us.
16. Value of other assets as of date of death (business entities, agreements, etc.)
17. Unclaimed property -- in my case, look at the California State Controller's website for unclaimed bank accounts and the like. My parents didn't have any of those.
18. Notice to County Assessor -- never did it. I'll have to do it in 2022, though. My mother's trust was the owner of record throughout 2021 as far as the Assessor's office is concerned.
19. Estate Tax form -- This is a biggie. Estate taxes are crazy-complicated if there's money involved. Get a competent CPA to do this. Warning -- it's ridiculously expensive, but it has to be done. A good CPA will know how to handle this and if there are any extensions that can be requested. If your mom is the last owner of the trust (no Dad still around?), then this may not be needed. I'm no tax expert, so get a good CPA on board.
20. Notify creditors of death -- Credit cards, etc.
21. Cash Needs Analysis -- a fancy way of saying "make sure you don't distribute all the money until you know if you need to pay additional taxes." Again, the CPA can give you an idea of how much to keep aside while allowing you to distribute the rest of the money. I've kept aside about $200,000 to cover taxes and any work we might do to the house to prepare it for sale. (It's a 100 years old, so it's a wreck.) The rest of the money has been distributed, but my brother knows that if something came up that costs more than what I saved, we're in half and half to pay for it. If your sister is not reliable in that way, don't distribute any money, or save back more than you think you'll need. She'll get her money eventually.
22. Distribution of Specific Bequests -- give away the stuff mentioned in the will, as in "to my great-niece Susie, I leave my rock collection."
23. Schedule tax work -- Individual Income Tax AND Trust Income Tax. In my parents' case, the trust owned the house and one investment account, but my mother inherited my dad's IRAs, which cannot be put into a trust. That meant she had her own income from the IRAs, so two sets of taxes it is. $$$ Got to love the Tax Man.
(Out of space AGAIN!! On to post #3)
Your attorney will guide you. The Trust pays for this. Use it as much as you need. If there is a special needs Trust to set up for a mentally ill sibling you will need help with that.
Dependent on how complex the Trust is depends on how difficult. NO HURRY. Take your time. There will first be a letter sent to all beneficiaries. You will form an account to pay any remainder bills. I don't know if there is real property; if there is it will be more complex.
So deep breath. You already took the RIGHT first step. You have an appt with Trust and Estate Attorney. Take the Trust, any will attached, and the details of the estate as you understand it. Ask your attorney to get EIN for you for all Tax purposes. There are many good books out there. One is the Grube father and son who wrote Please Don't Die but if you do die, What Do I do Next?
Good luck. If you have detailed questions ask us but your best guide is the attorney who practices in your state.
I am so sorry for your loss and I remember clearly the anxiety of assuming all this, but it WILL get done; get the help you need.
My mom died last October. She had set up a living revocable trust, and I was the primary trustee; my sisters would have been co-trustees if I couldn't/wouldn't take on the responsibility of the trustee.
I never met with her lawyer. Instead, I made an appointment with her CPA.
I can only tell you what I know about a living revocable trust; if your mom had a different type, then I can't really help.
First thing you will need to get is a new federal tax ID number; (mom's accountant took care of that for me) if it was a LRT, then upon your mom's death it becomes an IRREVOCABLE trust, meaning nothing else can be put *into* it; that's why you will need a new tax ID number, because if it's an LTR, it should have been under your mom's SS number.
You will need to contact the places where she had her assets: bank(s), stock accounts, IRA's etc. They will need the new tax ID number and the death certificate; they will want to see a copy of the trust, or at least the page that names you trustee upon your mom's death. There will be paperwork you will need to fill out, each place I went to for mom had different standards. The institutions my mom used then set up a new account under the name of the trust with the new tax ID number, and me as the trustee instead of her.
If mom had any assets in an IRA, they were probably not in trust, and should be able to be distributed directly to whomever she named as beneficiaries.
You will be responsible to file her final tax return, *AS WELL AS* the tax return for the new trust; it will be 2 separate filings because there are 2 tax ID numbers. If mom didn't have a permanent CPA (like she used a service like H&R Block with different CPA's each year) make very sure the CPA you go to has knowledge and experience in filing tax returns for a trust.
I put a push on to settle my mom's estate because I wanted everything wrapped up by the end of 2020, so I wouldn't have to file a 2021 return. I was very proactive with phone calls, and I was able to get all of the assets distributed by the end of 2020; it helped that my mothers assets were mostly liquid and there was no property I had to sell.
I kept a notebook and wrote down everything: who I talked to at various companies, dates, times, etc. I also kept copies of every check I wrote, including the checks I wrote when I distributed the funds to mom's beneficiaries.
Feel free to PM me if you have any other questions I might be able to help with.
Good advice. I will be going to their CPA whom I've dealt with on their tax filings for years now. I know she's very good so that's also reassuring, I'll prefer to work with her more than the attorney who set up the trust, most likely.
Thanks again.
Second thought is absolutely take whatever percentage of the estate is recommended or required in your state for your services. Your time and energy are valuable and deserve to be compensated, especially when you're also grieving.
Other than that your attorney can tell you (and probably take care of) some required tasks like posting notices in the newspaper, etc. I'm sorry for your loss.
I struggle to keep good records, so I will need to set up systems to help me organize (the previous replies to my question had great suggestions for how to do that).