Collection and Management of Assets:
The first duty of a representative is to protect and preserve the estate assets. The representative should
attempt to put together an inventory of all assets and their values as of the date of death.
Examples of assets can include:
- Copies of tax returns for last three (3) years
- Stocks and Bonds held in person and/or statements from all brokerage accounts and other financial institutions
- Real Estate Deeds
- Mortgages, Deeds of Trust and other Notes
- Cash accounts (checking and savings)
- Inventory safe deposit box
- Insurance policies
- Jointly owned property or joint accounts
- Other miscellaneous property
- Transfers during decedent’s life (taxable gifts; e.g., over $10,000)
- Powers of appointment
- Annuities
Valuables, such as securities, jewelry and other personal items of substantial value should be kept in a safe
place such as a safe deposit box, to which only representatives have access.
Additionally, the Grantor may
be entitled to various proceeds or income to be collected and/or located and accounted for, such as:
- Life Insurance proceeds
- Employer pension and insurance benefits
- Salary or other income payable after death
- Deferred compensation
- Vacation pay
- Social Security benefits
- Social Security burial benefits
- Burial benefits for the grantor from the state of residence
- Veterans' Administration benefits
The next step is for both the Executor and Trustee to check the powers that they will have over property by
referring to the Will and the Trust documents. You should consult our firm if you have any questions. Provided
that title of other assets was properly transferred into the name of the Trust, there will generally be no need
for any immediate change of title. However, bank and savings and loan accounts and security brokerage accounts
may need to be closed or have their ownership changed to reflect the representative's name. The representatives
should thereafter maintain an accurate record of all deposits into and withdrawals from these accounts, reflecting
the amount and sources of each deposit and the amount and purpose of each check drawn.
The representative will
not just ascertain what property belongs to the Trust, but must also establish the value of the property. The value
of the property must be known for a number of reasons, among the most important being determining whether an Estate
Tax Return must be filed, monitoring investment performance, and determining whether each beneficiary has received
his appropriate distribution. The value of property is usually established by appraisal, and this must be coordinated
with an expert for the type of asset in question. Therefore, assets requiring appraisal must be identified fairly
early. Types of assets requiring expert appraisals include:
- Real estate
- Business interests
- Jewelry
- Artwork
Of course, the representative may be succeeding to office on account of a prior representative’s incapacity or
resignation. In such case the records of the Trust may be current as to property owned and its fair market value.
Although the Trust absolves the successor representative from the acts of his or her predecessor, and permits him
or her to accept the predecessor’s accounting without inquiry, it is prudent for the new representative to verify
the statements of his predecessor. Whether the representative succeeds on account of the death or incapacity of the
Grantor, in either case he or she will need to change signature cards on bank accounts and have new checks printed.
To make these changes, the Executor will need a copy of the Grantor’s death certificate or an affidavit certifying
the prior Executor’s incapacity. Similarly, the Executor will need to establish authority with brokerage houses and
other financial institutions.
A representative should be sure to maintain adequate insurance on valuable
assets by making sure that existing coverages will continue after the decedent's death and making a note of expiration
dates on applicable policies, while also checking that coverage reflects current market values. Investment decisions
will need to be made. Cash income not needed for other purposes of administration, such as immediate payment of expenses,
should be placed in interest-producing investments.
In due course, it may be necessary to sell some of the estate's
property, either because an item should be disposed of to avoid needless expense or loss through depreciation in value,
or to raise cash for payment of expenses, taxes or legacies to beneficiaries. Assets should not be sold before first
consulting our firm, a CPA or an attorney to ensure that appropriate authority exists or can be obtained. Holdings in
a closely held corporation, partnership or sole proprietorship may pose special concerns and problems -- the representative
may be required to continue or windup the business in order to avoid a serious risk of loss to the estate. Again, our firm,
or your CPA or attorney should be consulted before the representative acts with regard to any businesses.
