As the executor of an estate, you may face a myriad of problems that arise from finalizing the estate. The roles and responsibilities of an estate executor are great, and completing the task can be extremely time–consuming and mentally draining. At times, you may be wondering if you are making the right choices or making the proper moves when it comes to ensuring the estate is in good hands. During this difficult time, it is important to remember what your job is and what types of mistakes you should avoid.
Avoid letting any stocks owned by the estate to fall short in the market. It is up to the executor to ensure the health of the estate’s finances. Not only does this include gathering up and accounting for all property and assets owned by the estate, but it also involves liquidating any stock options. You should use your best knowledge and judgment to liquidate the stocks at a good time as to maximize the return.
Do not make distributions to beneficiaries too early in the process. These are “at risk distributions” because the executor is responsible for any miscalculations or distributions made in error. All debts, taxes and expenses owed by the deceased are deducted from the estate’s value. You should avoid distributing property and assets to beneficiaries before this happens.
Look into selecting the “portability election” when filing federal taxes. This may help the estate earn a tax exemption. Ask about filing a Form 706 with your tax return or within nine months of the property owner’s death.
Finally, make sure you close the estate. You can do this by:
- Filing a settlement with the court
- Making sure the beneficiaries agree that they received their share
- Having a court judge approve of the distributions
- Resolving all tax issues
Once you have completed these duties, your role as an executor is at an end.