High Net Worth Tax Accountant
What Does the Executor of a Will Do?
A number of decisions have to be made when a Last Will and Testament is created. The majority of those decisions relate to the disposition of estate assets; however, there are other decisions that must be made as well, including the appointment of an Executor. All too often, the appointment of an Executor is more of an afterthought and is done without giving the choice much thought. A better understanding of the numerous and varied duties and responsibilities of an Executor, however, should point out the importance of taking the time to choose the right person for the job. Among those duties and responsibilities are the following:
•Securing estate assets – immediately following the death of the decedent, the Executor must locate, secure, inventory, and value all assets in which the decedent had an ownership interest.
•Opening probate – documents must be prepared and filed, along with the original Will, with the appropriate probate court to open the probate of the decedent’s estate.
•Notifying creditors – creditors of the estate must be notified that probate has been started. Notice must also be published in a local newspaper for unknown creditors.
•Reviewing claims – creditors have a specific amount of time within which to file a claim against the estate. The Executor must review all claims and approve or deny the claim. Approved claims must then be paid out of estate assets.
•Defending the estate – if the Will is challenged, or a creditor whose claim was denied chooses to litigate the claim, the Executor must defend the estate throughout the subsequent litigation.
•Managing property –the Executor is responsible for managing estate property throughout the probate process. For real property, this may include everything from ensuring that taxes are paid to overseeing necessary repairs or maintenance.
•Selling property – sometimes, estate assets must be sold to pay creditor claims or to create the required division of assets as called for in the decedent’s Will. When assets must be sold, the Executor is responsible for overseeing the sale.
•Paying taxes – before probate can be concluded, all personal and estate taxes must be calculated and paid by the Executor out of estate assets.
•Transferring assets – finally, the Executor is responsible for ensuring that all documents necessary for the legal transfer of estate assets to the intended beneficiaries are prepared and filed, after which the assets are actually transferred to the new owners.
It should be clear at this point that the choice of Executor can ensure that the probate process moves along smoothly and efficiently or can cause probate to turn into a lengthy and costly affair which is why the choice should only be made after careful consideration and contemplation.
Mark Feinsot CPA services high net worth individuals throughout Midtown Manhattan. If you are searching for a CPA tax accountant who helps families identify the right relationships to retain what you’ve saved, simply call us at 212-631-7578 and ask for Mark.
Estate Mistakes to Avoid
Once you have finally made the important decision to create an estate plan you certainly don’t want to make costly mistakes during the creation of the plan. Before you get started on your plan, consider the following five biggest estate mistakes to avoid:
1. Failing to plan for incapacity. Estate planning should not only contemplate your death but should also contemplate the very real possibility of your incapacity. In the absence of an incapacity plan your loved ones could waste a significant amount of time and money in a protracted legal battle over who will control your estate assets and who will make personal decisions concerning you and your medical treatment.
2. Not avoiding probate. Probate can take months, even years, to complete. Meanwhile, much needed assets are unavailable to the intended beneficiary. Converting assets to non-probate assets will save your loved ones both time and money and provide estate liquidity.
3. Failing to understand the tax implications of your plan. The transfer of wealth has tax implications, including federal gift and estate taxes. Failing to understand and plan for the tax implications of your death could end up significantly diminishing the value of the estate you leave behind for your loved ones.
4. Not leaving behind a funeral plan. Planning your own funeral and burial may not sound like fun but doing so will save your loved ones from making costly mistakes as well as ensure that your final wishes are honored. Ensuring that funds are available, or even pre-paying, for your funeral will also benefit your loved ones during their time of grief.
5. Failing to consult with an attorney. Estate planning is not the place to try and save money. The money you save now by going the “do-it-yourself” route will likely cost your loved ones considerably more after your death both in terms of dollars and cents and in terms of time spent litigating your estate.
Mark Feinsot, CPA has been providing estate planning services to high net worth families in New York City for years. If you’d like to discuss your situation, call 212-631-7578 and ask to speak with Mark. Our initial consultation is free.
