Sandra Reed’s Life Care Planning: Chart the course for smooth estate administration

This column has admonished readers of the importance of a will naming a person as independent executor. The will penned, properly witnessed and placed safely are only the beginning steps toward orderly passing of property at death.

Attorney Sandra W. Reed answers your life planning questions.

Attorney Sandra W. Reed answers your life planning questions.

The executor has the responsibility of gathering all property, preparing an inventory, and ultimately, distributing that property. He or she also must pay all debts of the estate, including taxes. The executor’s job will be a nightmare if he or she has no idea how to determine what property is included, where important documents are located and how to access accounts.

I recommend creating a comprehensive chart for the executor named containing all the information needed for smooth estate administration, including where the original of the will is located. Make sure the executor knows where to find the chart!

Follow the steps below to insure a seamless administration of the estate.

List, Lists, Lists

List all property owned. Make your property list specific. Vague descriptions of property owned (e.g., $500,000 in cash, $300,000 in real estate, oil and gas property worth $75,000 and life insurance of $100,000 is not sufficient. In fact, descriptions like this could be misleading, as values are certain to fluctuate. Instead, give the name of each bank holding assets, with the number of each account and what type, such as checking, savings, money market or CDs. Follow the same procedure for every brokerage firm holding investments

Review the papers filled out and signed in setting up each account.  Determine whether any accounts include rights of survivorship or pay on death provisions and include this information. Upon death, proceeds of accounts having these rights go to the person designated rather than into the estate.

The executor needs to know this.Texas law is extremely specific about what creates an account that carries pay on death or survivorship rights. Be certain the accounts are set up as desired. If unsure of whether an account is designated according to wishes, consult an attorney.

Don’t overlook retirement accounts. List all retirement accounts – IRAs, 401Ks, Roths, etc. Include the financial institution where these reside. Are they with a credit union, a bank or an investment firm? Determine if the institution holding a retirement account has specific requirements for dealing with the representative of an estate.  Include those instructions in your list.

 Include Life Insurance Policies and Annuities. Note on the list whether the policies are term or whole life or a hybrid. Document whether any annuity benefits continue after death to a survivor.

 Review beneficiary designations. Review each retirement account and life insurance policy. If you have not named beneficiaries for one of these, the proceeds will come into your probate estate at death. Include in the chart of assets the name of each primary beneficiary and contingent beneficiary on each account.

Add Oil and Gas Leases or Royalty Interests.  Include the company name, ownership reference numbers and contact information for obtaining royalty checks and other pertinent information.

List credit card accounts. Lists should include not only assets, but also credit cards. Include whether the name of the issuer of the credit card. In addition, chronicle account numbers, user I.D.s and passwords for the accounts.

List all mortgages and loans. Mortgages and all loans should be identified.

Cemetery arrangements and burial plots have a value. Specify whether pre-paid funeral and/or burial contracts have been made and whether cemetery plots have been purchased. If one or more has, identify the funeral home and/or cemetery involved.

Don’t forget airline mileage and other benefit point accounts. Check airline mileage and other benefit point accounts. These may survive death and provide added value to the estate. Provide information to allow the executor to access these accounts.

The blended family. Make certain that the true ownership of property is designated. This is especially important in families with inherited property or families with children from two or more marriages.

Safe deposit box key. Complete bank papers giving your executor power to open your safe deposit box. Include the location of the key in your list for the executor.

Personal and household items bequests. Include in your will the intent to leave a list of personal and household items you wish to go to certain individuals. Inform your executor where to find the list.

Location, Location, Location

Designate the location of documents relevant to listed property and debt.  The chart should tell the executor where to find all documents relevant to every asset and every liability (e.g., bank accounts, investment accounts, credit cards, mortgages and loans, etc.).

State user I.D.s and passwords or where to find them. Much financial activity today takes place through Internet banking or investing. Make certain to list user identification and passwords associated with these online accounts. Those who receive bills through emails should include user identification and passwords for these online accounts. This will allow the executor to avoid late fees and interest charges on accounts by paying invoices in the interim before establishing authority to receive billing directly.

Tell the executor where to find hidden valuables. If you hide valuables, state where they are. Don’t expect loved ones to hunt for cash stashed behind pictures frames or for grandmother’s heirloom jewelry in kitchen cabinets or refrigerator jars. For safety purposes, this list should be kept in a deposit box or a home safe.

Information regarding professionals. The executor should be provided the names, addresses (snail and email) and telephone numbers of your attorneys, accountants and financial planners.

Warning. Those who don’t follow the above advice may end up turning over in their graves at the unexpected cost of the administration of their estates. So start charting now.

Sandra W. Reed is an attorney practicing in Glen Rose. She is of counsel with the Elder Law firm of Katten & Benson in Fort Worth. If you have any questions, you may contact her by phone at 254-797-0211 or by email at swreed2@yahoo.com.

 

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <strike> <strong>