Picture this: Your parents live in a retirement home, where COVID cases are high. The residents are inherently at risk due to their age.
Suddenly, one of your parents falls ill and passes away. Then, while grieving this overwhelming loss, you learn you’re the “executor” in their will.
If your first two thoughts are “What is an executor?” and “What am I expected to do?”, you’re not alone.
An executor is the person someone names in their will that’s responsible for quarterbacking their estate after they pass. The person in question is usually a close friend or relative, or a trusted representative. This could be a financial planner or a lawyer.
Most people don’t know what an executor is until they become one. At this point, they’re forced to learn what it means. Even then, the role can be puzzling if you’re not a lawyer or someone who’s already been an executor.
“Ideally, your loved one would notify you of your executor duties well in advance,” says Darren Devine, President of Devine and Associates Financial Services Inc. “But we’ve seen many cases where the person doesn’t even know they’re the executor until the lawyer reads the will.”
The responsibilities of an executor kick in immediately after their loved one’s death. These can be everything from liquidating assets (properties, investments), to paying beneficiaries, to ensuring the deceased’s bills are paid.
And that word immediately shouldn’t be taken for granted. Failure to act quickly and assertively falls on your shoulders.
“This is a serious job,” Devine says.
“People take this role as trivial, but there’s actually a lot of liability with it. Say your loved one has $100,000 saved and three beneficiaries splitting that money three ways. As the executor, you dole out that money, but then you discover that your loved one owed $10,000 to a creditor. If you’ve already dispersed the full proceeds of the estate, the liability for that $10,000 rests on you.”
Here are five steps to help you prepare for this time-consuming, all-encompassing responsibility:
1) Talk about it with your loved ones.
Thinking about a loved one passing away, and the effects it will have, isn’t something any of us want to do. It’ll be much less stressful in the end to brave the topic now and know what you’re getting into.
2) Keep track of a copy of the will.
Whether it’s in a safe deposit box, a filing cabinet, or another hiding spot, you need to know where it is.
3) Know the right people to talk to.
When the time comes, you’ll be in touch with loved one’s accountant, lawyer, and/or financial planner. Find out who they are and where to contact them. They’ll help you recap what everything means and get to work.
4) Find out where the meat of the will is.
Take stock of your loved one’s assets, be it investment accounts, bank accounts, insurance policies, properties or cash.
5) Probate the will.
When you have a copy of the will, you’ll need to have it “probated” by a lawyer. This will legally confirm your authority as executor. Because this process can take some time, you’ll want to get the ball rolling as early as possible.
Another overlooked element to consider is your loved one’s online assets. This includes things like passwords for online back accounts, Paypal balances and credit at online retail accounts.
If the deceased never discloses this information, these assets could become inaccessible and lost online forever.
“There are other assets, weird ones, that we’re now starting to see,” Devine explains. “You’ve got 42 different web-based passwords. Your Facebook account, your Instagram, your bank, your email. Your loved one might’ve been a buyer of domain names. You now have to ask yourself, ‘Did you tell anyone what those passwords are?’”
Talking about death and having to think about these topics isn’t easy. If you feel overwhelmed, don’t hesitate to reach out to discuss it. If you want to learn more about being an executor, contact Devine & Associates Financial Services Inc. at 519-780-1730 or email [email protected].