Questions For Your CPA

Questions For Your CPA

My father died and I am the executor. What do I do?

When this question gets asked of me, my client is typically in a panic. I do not know of many who relish the job of executor, no matter how prepared you may be. Family dynamics can be tricky and many of us will feel “out of our depth” in projecting what should happen and when is the right time for things to be handled. I’ve recently had personal experience in this area, and find that the following 10 things should be done in the first few weeks after someone has died.

1.  Handle the care of any dependents and/or pets

If the deceased has dependants and/or pets, this is the first priority. Hopefully, the person who died made some arrangements for the care of a dependent spouse or children.  Decedents frequently overlook the care of pets upon their death.  If the death was unexpected and there are immediate needs that must be addressed, you’ll need to call a local estate planning attorney about your options after you’ve ensured the child, dependent, or animal is cared for. In these situations, you may have to ask a court to issue emergency orders to ensure the protection of the minors or dependents.

2. Arrange for funeral and burial or cremation

One of the most immediate concerns you’ll face is arranging for a transfer of the body to a funeral home or mortuary. Hospitals will typically assist you with this, as will nursing homes and other health care facilities. Search the decedent’s papers to determine whether they have a prepaid funeral contract or burial plan. Ask a friend or family member to go with you to the mortuary. Decide how you will pay for the funeral and memorial service. Unless the decedent made you the joint owner of a bank account, you and close family will need to front these costs and get reimbursed from the estate. You may be tasked with writing their obituary.

3. Monitor the home

Keep an eye on the decedent’s home, answer phone messages, collect mail, discard food, and water plants.  If you do not live near the decedent’s home, ask a friend or relative to handle this task. Consider changing the locks and having their mail forwarded to your address. Don’t give away any personal property in this first week. Keep current all essential utilities like heat, trash, and electricity. Save all receipts and create a spreadsheet with all expenses to be reimbursed.

4. Notify close family and friends

Ask someone to contact others to tell them of the decedent’s passing. Find the decedent’s address book and look for their e-mail contacts.  Send cards to those who do not use e-mail regularly.

5.  Prepare the funeral service

In some religious faiths, the funeral service occurs soon after death.  Find any directions from the decedent in this regard.  If there are no such directions, gather close family members and create an outline of the service.  Visit with the clergy member to review the service.  Prepare remembrances and gather photos for the wake and the funeral reception.  Contact the restaurant or other venues at which you want to hold the reception. If appropriate, a eulogy for a funeral or memorial service may also be warranted.  Feel free to delegate this task if you know others who could handle this delicate assignment as well or better than you.

6.  Prepare an obituary

It will mean a lot to the family if you take the time to prepare an obituary well.  Send the obituary to the local newspaper.  If the decedent retired to another city and state, send the obituary to the newspaper there as well.

7.  Order Death Certificates

Get at least 10 original death certificates.  The funeral home will usually order these certificates for you.  Executors need original death certificates to apply for admission of the Will in Probate Court, change the ownership of joint accounts, and obtain the date of death values of investments for preparing the estate tax return.

8.  Find Important Documents

Those documents include the Will, any Trust Agreement, the latest bank account statements, investment statements, deeds, birth certificate, marriage certificate, divorce decree (if any), Social Security information, life insurance policies, certificates of title to vehicles and keys to the safe deposit box or home safe.

9.  Hire an Attorney

You are not required to hire an attorney, but mistakes can cost you money. You may be personally liable if something goes wrong with the estate or the payment of taxes. An attorney can help you make sure all the proper steps are taken and deadlines met. Have your lawyer prepare the Application for Probate and file the Application and waivers with the Probate Court in which the decedent resides.

10.  Call the Employer

Call the decedent’s last employer if he or she was working or received a pension or health insurance benefits from the employer. Request information about the amount of benefits, the successor beneficiary of those benefits, and any pay due. Ask whether there was a life insurance policy through the employer.  If the company provides life insurance, ask for an IRS Form 712 and the beneficiaries of the policy.

Once you’ve addressed the immediate needs that arise after the death, you’ll have to begin the process of managing and settling the estate.  The estate settlement process is the legal process of disposing of the assets, paying the debts, and addressing any other questions or legal issues that might arise, such as who becomes the owner of the decedent’s pets, or who is legally responsible for caring for any young children who were in the decedent’s care.

All this can be a lot of work, but remember that the executor is entitled to compensation, subject to approval by the court. Keep in mind that the compensation is counted as income, so you will need to declare it on your income taxes. Read here for more information on being an executor. You will also find your CPA, or the deceased’s CPA will be a tremendous source of advice.

Daniel DeHoek
Managing MemberCPA | ABV | CFP®