The responsibility of "settling an estate" is not an honor to be given to a faithful friend or a trusted relative - unless they possess the necessary knowledge, skill, time and temperament to handle the demanding requirements.
Whether acting as executor of an estate or successor trustee of a living trust, knowledge of tax law, business arrangements, property law, and investments are critical.
Settling an estate or winding up a revocable living trust at the death of the creator, both involve a number of steps.
- Qualifying to act. The court will formally appoint an executor by issuing Letters of Appointment.
- Take control of all assets. Responsibilities include locating and inventorying all assets including hard to identify and locate assets.
- Protecting assets. This includes their physical, secure possession, adequate insurance coverage and protection from waste and deterioration.
- Taxes. Filing, negotiating and settling both federal and state liabilities. Negotiating the value of assets such as real estate and closely held business interests is critical to avoid overpaying death taxes.
- Accounting and Distribution. A full accounting and distribution to the correct beneficiaries are the final steps in "settling an estate."
In choosing an executor or successor trustee, look for:
- Training, experience and qualifications.
- Needed facilities and resources to properly settle the estate.
- Full time, day in and day out availability.
- Financial responsibility.
- Unbiased objectivity, yet sympathetic understanding of the needs of your family.