Whether or not an estate is admitted to formal probate with a court, certain information needs to be gathered and actions taken relative to the financial affairs and property interests of the deceased person ("Decedent"). This checklist organizes and assists the person, generally a close family member, charged with initiating these types of activities.
The decision as to what formal procedures will be required, if any, to transfer assets and wind up the financial affairs of the Decedent vary not only from state to state, but also depending upon the complexity of the estate. Factors such as the value of the estate, whether or not assets were held as "joint tenant with rights of survivorship", whether the Decedent had a Living Trust, or Decedent was a party to a premarital agreement may impact the type of procedures required. The information presented in this checklist will also aide discussions with advisors regarding what type of procedures are required to finalize a Decedent's affairs.
Decedent's name: _________________________
Date of birth: __________________
Date of death: __________________
Social Security Number: ___________
Cause of death listed on death certificate: _________________________
Administering an estate involves gathering various types of information. Many people prepare lists of personal information during their lifetime which will help the person administering the estate (the "Executor", "Administrator", or "Personal Representative"). If such a list cannot be found, you may want to use the "Personal Information" document to assist in organizing this type of information.
Of immediate concern is the security and safekeeping of assets, custody and care of minor children or other dependents of the deceased.
1. Orphaned minors/Dependents
Consult a lawyer regarding the appropriate action under the circumstances for the immediate custody and care of any orphaned minors or dependents of the Decedent.
2. Valuables/Personal Property
Locate, secure and inventory family heirlooms, antiques and all other personal property items of value. A photographic or video inventory of household goods and personal property of the residence can be of great help in the valuation and distribution of such items. It can also help to avoid difficulties between the heirs and beneficiaries of the estate by identifying all personal property items, and by insuring that no items are removed from the residence prior to the formal distribution.
3. Estate Checking Account
Next, it may be necessary or advisable for the Personal Representative to open an estate checking account, or other segregated account. The Personal Representative must keep the assets of the estate separate from his/her own funds. The estate account will aid in the record keeping of all cash that is received or disbursed by the estate. In order to open an estate account, the Personal Representative will probably need to obtain an estate (taxpayer) identification number ("Employer Identification Number" or "EIN") from the Internal Revenue Service. This is because the IRS considers the estate a separate taxpayer entity, in the same way that an individual or business is a separate taxpayer. IRS Form SS-4 is used to request an EIN. This form can be obtained from your local IRS office, or through your attorney or accountant.
Financial Institution: _________________________
Account Number: ____________________
Estate (taxpayer) identification number: ________________
Collect all mail, and deposit all dividends, interest payments, rent, and other receipts into the estate checking account or other segregated account.
5. Safe Deposit Box
If the Decedent had a safe deposit box, either individually or jointly with another person, locate the safe deposit box keys. The contents of the box must be inventoried by the Executor and a bank representative. Consult the bank's representative regarding the bank's procedures for obtaining certain needed items which may have been stored in the safe deposit box, such as the will, burial-plot deed, life insurance policies, or pre-paid funeral contracts. Generally, once the contents have been inventoried, the Executor will be able to remove documents needed for the probate process.
Verify that liability and property insurance are in force.
Notify the insurance agent if the Decedent's residence will be vacant.
Many property insurance policies have specific clauses regarding the vacancy of an insured property, and will require that certain actions be taken to secure the property during the period that it is not being occupied.
Locate the original document (or a copy of)
The deceased indicated the distribution of items of personal property by a written statement, letter or list.
The name, address, and social security number of certain relatives of the Decedent ("heirs"), as defined by law, should be obtained. These individuals are usually considered to be "interested persons" in the estate, because they could inherit from the Decedent if the will is found to be invalid, or if the Decedent did not leave a will or trust document. The heirs may need to be notified that the will has been admitted to probate and of other matters during the probate proceedings. This identification is most easily done by means of a "family tree" chart, which illustrates each generation of the Decedent's ancestors and descendants. A lawyer should be consulted if there are questions regarding the state's definition of "heirs".
OTHER ACTIONS TO BE TAKEN
1. PAYMENTS TO CREDITORS
It is the responsibility of the Personal Representative to pay legitimate debts of the Decedent and expenses incurred by the estate. By using the estate checking account for this purpose, the Personal Representative can maintain an accurate record of expenditures, some of which may be deductible on the estate or inheritance tax returns. Types of debts that should be considered are:
a. Hospital/Doctors/Health Care Providers
b. Ambulance, pharmacy, care facilities, nurses, caregivers
d. Rent, lease, or mortgage
e. Business debts
f. Maintenance of deceased's residence
g. Utilities and insurance
h. Administrative expenses in transferring assets/preparing for estate sale
i. Motor vehicle payments
j. Funeral expenses
k. Other: ____________________________________________
A lawyer should be consulted if it appears that there will be insufficient funds to pay all expenses.
2. SOCIAL SECURITY BENEFITS
The local Social Security office should be contacted to determine what benefits, if any, may be available for the surviving spouse or minor children.
3. CREDIT CARDS AND CHARGE ACCOUNTS
Close any credit card accounts, or other charge accounts, of deceased (if these accounts were held in more than one name, request that the Decedent's name be removed).
4. INVENTORY OF ASSETS AND LIABILITIES
A complete listing of all the Decedent's assets and liabilities must be prepared. This information can be organized with the "Personal Information" worksheet. Look through the important papers and files kept by the Decedent and examine the monthly statements addressed to the Decedent. Liabilities include loans, mortgages, and rental payments, as well as the expenses of the Decedent's last illness and funeral home expenses. This listing will be required if the estate is probated. It also serves as a checklist to assure that all assets are properly distributed, and all outstanding debts are paid or otherwise discharged.
5. CAPACITIES IN WHICH DECEDENT SERVED
Consider whether the Decedent served in any representative capacity. If so, arrangements will need to be made to transfer the authority and responsibilities to another person or entity.
a. Power of Attorney for another individual
b. Trustee for a trust
c. Personal representative for another estate
d. Conservator or guardian of another person
e. Custodian under the Uniform Transfer to Minors Act
f. Under guardianship or conservatorship (Note: a final accounting will need to be submitted to court before termination will be granted.)
g. Registered agent for a company
Early in the estate administration, the Personal Representative should advise each beneficiary of their option to refuse ("disclaim") their share of an estate. This refusal, or disclaimer, must be made within a time period specified by state statute or federal law. A lawyer should be consulted regarding the applicable time limits and/or the consequences of disclaimers.
Name of beneficiary: _________________________
Amount disclaimed: $_______________
The following documents should be obtained, as they will be useful in preparing an Inventory of the estate assets, as well as any necessary tax returns. They may also be essential to effect a formal transfer of an asset to the appropriate beneficiary:
1. Decedent's most recent income tax return.
2. Description of real estate, including title insurance policies, and/or abstracts of title.
3. Motor vehicle titles or registration certificates.
4. List of bank accounts, stocks, bonds, and other investments. (Refer to monthly statements received by deceased.) (Note: This information can be organized with the "Personal Information" worksheet.)
5. Gift tax returns filed by the Decedent.
6. Life insurance policies owned by the Decedent on the lives of others. (The cash value of the policy is an asset of the estate.) Contact the insurance agent for assistance in modifying and/or transferring the ownership of the policy.
Note: Any Power of Attorney that the Decedent may have signed, authorizing another person ("Agent") to act on behalf of the Decedent (the "Principal") ceases to be effective upon the Decedent's death.
TRANSFER OF TITLE
Determine if the Decedent owned any property with another person, whether as tenants in common or as joint tenants. Whether or not the Decedent's estate is formally probated, it is important that the title of real estate, motor vehicles, stocks, bonds, bank accounts, or any other asset be transferred to the appropriate person. This may be accomplished through formal probate, affidavits, or by procedures identified by the financial entity, e.g. bank, insurance company, or a corporation's transfer agent.
Joint Owner: _________________________
Title: Joint tenants with rights of survivorship
Although title automatically passes to the surviving joint tenant(s) of property owned as "joint tenants with full rights of survivorship", legal title in the surviving owner(s) will not be recognized until the Decedent's name is removed. Contact a lawyer regarding the appropriate procedures, particularly with respect to real estate. Bank accounts and motor vehicle titles may be changed by presenting a death certificate to the appropriate office, and completing any other documents required by that office. Contact the stock transfer agent to determine what is required to transfer title to stock certificates. It is very important to remove the Decedent's name from the title of property to avoid confusion upon the transfer of the asset by the surviving owner(s) or upon the death of the surviving owner(s).
Consider whether assets will be sold during the administration or conveyed to the beneficiaries who may sell them. A combination approach may also be used.
The Personal Representative has requisite authority to sell assets or real estate.
Certified copies of "Letters of Appointment" or other document evidencing personal representatives authority may be required for the transfer or liquidation of stocks, investment accounts, or bank accounts. Additional forms may also be required by the transfer agent or financial institution.
If the Decedent owned stocks, consider transferring shares of stock to the beneficiary rather than liquidating them. The beneficiary will receive a stepped-up basis in the property (the Decedent's accounting basis in the asset is transferred to the beneficiary, potentially avoiding some capital gains tax). Consult a lawyer or tax advisor regarding this alternative.
The Decedent owned property in another state and an ancillary administration may be required in that state in order to effect the transfer of title, particularly real estate.