When it comes to estate planning, there are many things you can do to help your loved ones and executor after you pass away. Making sure that your executor has all of the information they need to administer your estate is crucial. This way you can take some stress off their shoulders. So how can you help your executor before you die, exactly? Here are some tips for preparing them before they distribute your assets.
Communicate openly, honestly and directly
Your executor can only execute your estate plan as accurately as possible if they are familiar with your wishes. Firstly, if you have an elaborate estate plan, make sure your executor is aware of it. If you don’t, think about creating one now so that you can communicate with your executor before you die.
Openness and honesty are key here. This way you’re making sure that all aspects of estate are handled in accordance with our wishes. That’s especially important when dealing with financial matters like estate planning or inheritance. It’s important for both parties to be transparent about their goals and needs from the start. With this approach you avoid misunderstandings down the road.
Organize your estate documents
Collect all important documents and make sure your executor knows where they are. This includes things like: birth certificates, marriage license and divorce decrees.
Keep copies of important documents in a safe place yourself. For example, in an attorney’s office until the attorney ships them off to your executor. You can even organize documents by topic like “finances” or “taxes”. This way it’s easy for someone else to find what they need when they need it.
So, how can you help your executor before you die? Let’s see some examples of important document that should be easily available for your executor.
Last Will and Testament
If you are reading this, then it is likely that you have a will in place. But have you ever considered what happens after your death? How does your executor get the information out of your file cabinet or computer? What will they do with all of those papers and boxes?
It’s important to make sure that your executor has access to all relevant documents. First and foremost, this includes a copy of your last will and testament. The last thing anyone wants on their plate is trying to track down every document regarding the estate. Especially when there are already so many tasks at hand!
That’s why Myend lets your Legacy Contacts know that you die. Then they can give access to the correct executors you have mentioned. Curious about how this works? Have a look here.
Tax returns
It may seem like a no-brainer, but it’s important to have your tax documents in order before you die. Your executor, may realistically be responsible for filing your person’s taxes and paying all of their debts. This can be expensive and take up a great deal of time.
Maybe your executor doesn’t know where to start. No worries, the IRS has several helpful resources on how to file tax returns for someone who has died. They can also find state-specific information by contacting the state department of revenue in their state directly.
If you don’t want to get into the weeds yourself, there are other alternatives. For instance, you can offer access to your estate planner or accountant so they can prepare any necessary paperwork.
Investment account statements and documentation
If you have any investments, there are a few things that will help your executor avoid confusion and delays. A complete list of all your investment accounts and the balances in them is essential. Your executor should also know if any of your investments are in other people’s names. Or, for instance if they are part of a trust for someone else. Although not technically investments, property documents, deeds and mortgages are also significant.
Accounts with insurance companies (life, health, auto, etc.)
List the insurance companies with which you have policies. These include life and health, auto, and any other lines of coverage. Note any additional information about those policies (i.e., the names of beneficiaries).
If you have contact information for the insurance company, include it here. If not, try to find it by searching online or calling the customer service line.
Bank accounts, credit card accounts and loan agreements
Provide your executor with details of your bank accounts, credit card accounts and loan agreements. If you don’t want to share those while you’re still alive, make sure they have access immediately after you die.
You need to be very careful with these documents. On a side note, needless to say you need to be able to completely trust your executor.
But is there anything else you can do for your executor? How else can you help your executor before you die
Have some cash available to your executor
The first thing to know is that cash is the most secure way to helping your executor with expenses. This is because they can’t claim it back, so they aren’t tempted to use it for something else. Leaving them money only in a bank account could be a bit risky. This is so because there’s a possibility that their accounts may not be directly accessible. Most banks would freeze accounts after someone dies.
However, your executor may need to cover some initial expenses before they can proceed with distributing your estate. So having some cash available might be useful to give your executor an initial helping hand.
Plan your executor's compensation
An executor’s compensation is a common part of the probate process. However, many people don’t know how to calculate this fee. To help you figure out what’s reasonable for your situation, we’re sharing are some guidelines.
In some cases the executor may receive up to 10 percent of the total value of the estate. If you have any outstanding loans, however, then your executor will need to make sure that they pay those debts first. Only then they can receive payment from your estate.
You should also think about whether or not your state has laws regulating how much can an executor’s fee be. How can you avoid greedy relatives who might want more than their fair share? You may find it useful if you keep some assets in a trust. Finally, keep in mind that some relatives ma find it awkward to receive compensation for acting as your executor.
Final Thoughts
We started this post by asking how can you help your executor before you die. Hopefully, the information in this article will help you with making your executor’s life easier. As we’ve seen, there are many factors that go into helping an executor. It’s important to know that you’re working with someone who can handle all of these responsibilities. If you find these tips useful, have a look at Myend’s services.
Myend offers the perfect estate and end-of-life planning for all! This way navigating such complicated issues gets easier. Have a look here to learn more. And if you’re ready for action, sign up today for your free account! The estate planning of the future is here today.
