As the attorney in the office that assists trustees and executors with the transfer of assets after death, I have the opportunity to work with many families concerning unique and interesting issues. I always tell my clients that the less family, assets and wealth they have, the easier it is to administer the estate. However most people don’t live their lives in order to make estate administration an easy process. People want to live their lives to the fullest enjoying all aspects of what life has to offer. Unfortunately, without proper planning, the process of settling the estate becomes more difficult.
The first matter to consider when a person dies is the funeral. Funerals can cost a lot of money or cost nothing at all. Donating your body to science is free and there is no requirement that you have a funeral service. Most likely your family and friends will want to pay tribute to you in a service or life celebration. Preplanning and prepaying your funeral will be a gift you can give your loved ones that they will very much appreciate. Make sure that you keep receipts for anything you spend on the funeral. Most funeral expenses are reimbursable from the estate.
Next the trustee and/or executor of the estate will need to meet with an estate planning attorney to review the estate administration process. If you are the trustee or the executor you want to carefully consider who else to bring to this meeting. It is not a good idea to bring the entire family. This can get complicated and possibly cause some misunderstanding. An extra set of ears or someone to take notes may be all you need. Also, unlike the movies, there is no “reading of the will”. The last will and testament will be filed with the Register of Wills in the county where the decedent last resided and anyone who is interested will be able to read the will on their own. If the decedent planned their estate with a living trust, then the beneficiaries of the living trust are entitled to a copy of the trust.
The attorney will want to review the will and/or trust and verify that you are the person who can make decisions for the estate. The attorney will also want to see the death certificate. By the way, when ordering death certificates you may just want to get 4-5. If you need more you can always order them. Most people who want to see the death certificate will make a copy of it and return the original to you.
The attorney will then ask you questions about the decedent’s assets and liabilities. As the administrator you will be responsible for valuing, appraising and inventorying all the assets of the estate. You will also be responsible for paying debts and taxes. However, you should be cautious as to which debts you pay. If you pay debts that are not valid, then that money may be coming out of your pocket.
Once the inventory of assets is created an accounting is prepared. The accounting will show all income, receipts, disbursement and expenses. The beneficiaries of the estate will be entitled to a copy of the accounting. Therefore, keeping accurate records during the estate settlement process is important. For all your efforts you will be entitled to a fee for the work you did. The fee is set by the laws of the state of Maryland. In probate cases the fee has to be approved by the court before it is paid. You will want to include the fee on the accounting. Your fee is also subject to income tax and must be reported to the IRS as income.
As you can see, the administration of an estate is complex. Meeting with a qualified estate planning attorney is an important step in establishing and administering an estate.
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