Friday, November 09, 2012

My New Full Time Job - Executor

Since my mom passed away in late 2011, my sister and I (the executors) have been putting off transfering my mom's estate and my dad's trust to the heirs, which are my sister and me.  First, it saddened me to do the work since it reminded me they were gone.  Second, I never really wanted or needed any of their belongings.  I would much rather have my parents still with us than to be dividing up their assets.

However, I really don't get a choice.  As an executor, I have a legal and financial responsibility follow my parents final wishes and divide up the assets.    Being an executor is really a big job.   For me, it will be a full time job over the next few months.   Here's why it will be full time:
  1. Stock assets.  This has been my individual area of focus.  My parents were major diversifiers of the financial institutions they used.  They had 75 DRIP accounts, 2 mutual fund accounts, 2 brokerage accounts, 1 401K account, 1 Roth IRA, 1 Traditional IRA.  They would have had more, except that my dad's IRAs were merged with my mom's at his death.

    Each account has their own rules and processes for transferring assets to heirs.  No two companies have the same process.  So it's taken significant time to learn each one, get the forms filled out and the have our signatures Medallion guaranteed, which can be a challenge since my sister and I live in different states separated by over a thousand miles.

  2. Real Property.  My parents owned a house, investment land and a partnership in commercial rental property.  The partnership is the most straight forward since my sister and I can own individual shares of the partnership, which can be sold like a private share of stock.    We are currently looking at selling the house and investment land which will allow us to divide the proceeds from the sale.   An alternative is the have one buy out the other, and we will use an appraiser to value the property if we choose this option.

  3. Bank Accounts.  My sister is handling this one.   Her plan is to write checks to each heir to split the accounts, and they fill the necessary forms to close the accounts, which I expect will include my signature.

  4. Personal Property.  My mom had given each child items that were of special sentimental value, e.g jewelry, heirlooms, and collectibles, before she passed away.  My sister and I have agreed that either on of us can take anything else.   We plan to clean out the house with a big yard sale and donate the remainder to a charity.
For each element, we need to ensure we keeping proper records for current and future tax returns.  For example, we need to value all assets at the date of death and make that the new cost basis.

Overall, I expect the work will take about six months to fully transfer the estate.   Once the paperwork is completed for the stock transfers, I will focus my effort on finding buyers for the investment land.

For more on Reaping the Rewards, check back every Friday for a new segment.

This is not financial advice. Please consult a professional advisor.

Copyright © 2012 Achievement Catalyst, LLC

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