What to Expect as an Executor; Inheritance Management

1. WHAT TO EXPECT AS
AN EXECUTOR
GUIDANT WEALTH ADVISORS
35 WEST SLADE STREET
PALATINE, IL 60067
847-330-9911
GUIDANTWEALTH.COM

2. THE OPINIONS EXPRESSED IN THIS MATERIAL ARE FOR
GENERAL INFORMATION ONLY AND ARE NOT INTENDED TO
PROVIDE SPECIFIC ADVICE OR RECOMMENDATIONS FOR
ANY INDIVIDUAL. TO DETERMINE WHICH INVESTMENTS MAY
BE APPROPRIATE FOR YOU, CONSULT YOUR FINANCIAL
ADVISOR PRIOR TO INVESTING. ALL PERFORMANCE
REFERENCED IS HISTORICAL AND IS NO GUARANTEE OF
FUTURE RESULTS. ALL INDICES ARE UNMANAGED AND MAY
NOT BE INVESTED INTO DIRECTLY.
COPYRIGHT © 2013 GUIDANT WEALTH ADVISORS ALL
RIGHTS RESERVED.

3. TERMS
TO
KNOW
•
Executor: is a person that performs or carries out
some act
•
Administrator: is a person that has been appointed
by the courts to manage the assets and liabilities of
an intestate decedent
•
Trustee: is a person that has legal title to property,
holds it in trust for the benefit of another and has a
fiduciary duty to that beneficiary
•
Fiduciary: is a person that must exercise a high
standard of care in managing another’s property
•
Intestate decedent: is a person that died without a
will

4. PROBATE
Probate generally takes place in the county in which
the decedent resided.
The court supervised process by which a
representative is appointed to pay the
• Debts
• Taxes
• Expenses
of a deceased person and that any remaining
assets are distributed to those that are legally
entitled to such assets.

5. POSSIBLE
NONPROBATE
ASSETS
Generally these assets should be payable to someone
other than the decedent’s estate in order to avoid probate.
•
•
•
•
•
•
•
•
•
•
Trusts
Pay-on-death accounts
Transfer on Death Instruments
IRA
401(k)s
Joint tenancy property
Life insurance policies
Land trust agreements
Annuities
Small Estate Affidavit (less than $100,000 of personal
property)

6. POSSIBLE
PROBATE
ASSETS
Generally, assets subject to probate court include:
•
•
Assets titled in the decedent's sole name, payable
to the decedent's estate and real property held as
tenants in common.
Determined by state property law

7. TAXES
•
•
•
The estate obtains its own taxpayer identification
number from the IRS to report all items of income
and gain (and deductions) accruing during the
post-death administration process
The Estate may report its taxable activities on
either a calendar year basis or a fiscal year basis.
(i.e. Decedent dies April 20, 2013; end of fiscal
year March 31, 2014)
The rules surrounding fiduciary taxation are
substantially different from personal income tax
rules

8. START
PROBATE
PROCESS
•
•
•
•
•
•
THE FIRST
STEPS
•
Funeral arrangements
Copy of will
Death Certificates from the funeral director
Copy of funeral bill
Immediately, the residence must be secured. This
prevents confusion and theft.
Arrange ancillary administration for out-of-state
property
Notify the local police department the house or
condominium is vacant

9. OPEN THE
ESTATE
•
•
•
PREPPING
FOR
PROBATE
COURT
•
File the will with the Clerk of the Court (no fee to file in
Cook County)
“Petition for Probate of Will and for Letters
Testamentary”
A filing fee is paid, court date is set and several other
required documents must be prepared and filed
(including an affidavit of heir ship and the oath & bond
of the representative)
If everything is in order and there are no
objections, the judge will enter an order opening the
estate, appointing the representative and ordering
"Letters of Office" to issue.
continued….

10. OPEN THE
ESTATE
PREPPING
FOR
PROBATE
COURT
continued….
•
•
•
Letters of Office is the (one page) court-sealed
document that serves to notify third parties holding a
decedent's assets that a person has died and a
representative has been appointed to act on behalf of
the estate for all matters
After the estate is opened and letters of office have
been issued, the representative should publish notice
of probate in an appropriate newspaper. (claims of
potential creditors against the estate are time-barred
within six months after the first publication date)
Notice to Heirs or Legatees that the estate has been
opened and of their rights

11. ADMINISTER
THE ESTATE
• Inventory all of the decedent's assets including
household and personal
• Collect all life insurance proceeds payable to
the estate
• Obtain a taxpayer identification number
• Establish an estate checking account
• Examine safety deposit box (need access
affidavit)
• Transfer all securities to the estate account
continue to collect dividends and interest on
behalf of the heirs of the decease
• Direct written notice to any and all "known or
reasonably ascertainable" creditors
continued….

12. CLOSE THE
ESTATE
•
•
•
Before closing the estate the representative is
required to provide a Final Accounting to the
beneficiaries
Prepare a Final Report for the court and obtain
signed receipts from all beneficiaries entitled to
distribution and from any outstanding creditors, to
present to the court at closing
Distribute the remaining assets as directed by the
Will and as detailed in the Final Accounting and
approved by the beneficiaries

13. CLOSE THE
ESTATE
TAX FORM 706
•
•
•
If assets are more than $5,120,000 - file estate tax
form 706
Using this form, calculate the estate tax due
This form must be filed within 9 months of the date
of death

14. CONSIDER:
•
Retaining an Attorney to assist you with the
settlement of the decedent’s estate.
•
Retaining a C.P.A. to assist you with complex tax
situations and tax returns.
•
Remember you are a fiduciary.

15. WHAT ARE
THE
QUALIFICATIONS TO
SERVE AS AN
EXECUTOR?
1)
2)
3)
4)
Individual is 18 years or older
A United States resident
Not a convicted felon
Not under a legal disability

16. DOES EVERY
ESTATE HAVE
TO BE
PROBATED?
No. Illinois probate is generally necessary when
the aggregate value of the decedent's personal
estate (all assets other than real property) is
valued at $100,000 or more.

17. WHERE DO I
FILE THE WILL
AND WHERE
DO I OPEN
THE PROBATE
ESTATE?
The proper venue for filing a will and opening the
decedent's probate estate is generally at the
courthouse in the county where the decedent last
resided and intended to remain.

18. WHAT
HAPPENS
WHEN
NOBODY IS
WILLING TO
SERVE AND
ADMINISTER
THE ESTATE?
Each county has its own Public
Administrator, authorized by Illinois statute, to
handle such situations.

19. IS AN
EXECUTOR
ENTITLED TO
COMPENSATION?
Yes. Every Executor and Administrator is entitled to
receive a reasonable fee for his or her services.

20. THANK
YOU.
This is just an overview of what an Executor can
expect. This is not legal or tax advice.
Guidant Wealth Advisors
35 West Slade Street
Palatine, IL 60067
847-330-9911
GuidantWealth.com
Securities offered through LPL Financial, Member FINRA / SIPC.
Investment advice offered through Guidant Wealth Advisors, a registered investment advisor and separate entity from LPL Financial.
October 2013