Once you have completed the hearing, received letters testamentary, and have been appointed as independent executor, there are a few key, court-related deadlines you need to keep in mind.
Notice to Creditors & Notice to Beneficiaries
First, within 30 days of being appointed as the executor, you will be required to publish a Notice to Creditors in a newspaper of general circulation that advises creditors of your appointment as independent executor. Additionally, within two months of your being appointed as independent executor, you will need to mail a certified letter, return receipt requested to each secured creditor of the decedent’s estate. You are required to file proof of these two notices with the court.
Beneficiaries of the decedent’s estate (other than yourself since you are the executor) are required to receive notice within 60 days of your appointment as independent executor. The notice must include either a copy of the will that was admitted to probate with a copy of the Order, or a summary of the gifts made to the beneficiary under the will along with the name of the court that admitted the will to probate, the docket number assigned to the estate, the date the will was admitted to probate, and the date the court appointed the independent executor. All notices to beneficiaries must be sent certified mail, return receipt requested. Additionally, you must file, within 90 days of your appointment, an affidavit with the court stating that the notices to beneficiaries were given or explaining why they were not.
Perhaps the biggest deadline the independent executor needs to be aware of is the requirement that an Inventory, Appraisement and List of Claims (the “Inventory”) be filed with the court within 90 days of your being appointed as independent executor. The Inventory is best thought of as a “snap-shot” of the decedent’s estate at the time of the decedent’s death. Please note that the decedent’s liabilities are not included on the Inventory. Items that have a beneficiary designation (retirement accounts, life insurance payable to a designated beneficiary, etc.) and property owned with another person as joint tenants with a right of survivorship are also not included on the inventory.
The inventory will generally include the following items:
- List of all real property interests (including mineral interests) – To value your real property interests, surface interests can be valued based on a realtor’s opinion letter, and mineral interests can be valued by averaging the royalties received over the previous three years. There usually is not a need to get a full appraisal of the property interests unless the decedent’s estate is going to be taxable and require the filing of an estate tax return.
- Stocks and bonds – These will be given a date of death value, which is usually obtainable through an internet search or a computer program owned by your attorney.
- Mortgages, notes and cash –This includes amounts owed to the decedent (e.g. notes receivable) and any cash or cash equivalents owned by the decedent (e.g. checking accounts, savings accounts, certificates of deposit, etc.). These will need to be given a date of death value, which is usually obtainable through a bank statement or, in the case of a promissory note, through a simple calculation.
- Insurance payable to the estate – Life insurance that is payable to a decedent’s estate is included on the inventory in the amount of the death benefit received by the estate. Insurance that is payable to a specific beneficiary (e.g. a spouse) is not included on the inventory.
- Miscellaneous property – This will include property not covered by the above categories including such items as vehicles and personal property (i.e. jewelry, furniture, other household furnishings, etc.). Vehicles are easily valued using something like Kelly Blue Book. Personal property and household furnishings are given a lump sum value, which should be based on the value you would receive for those items if they were sold as part of a garage sale. Items of personal property do not need to be listed individually unless they are of significant value (e.g. a Picasso painting, an extraordinarily fine piece of jewelry).
Finally, note that the inventory can be (and often is) extended to allow additional time to gather the information necessary to file the Inventory. Typically the extension is for 6 months from the end of the 90-day deadline, but if an Estate Tax Return is being filed, then the Inventory’s deadline can be extended to match that of the Estate Tax Return.
Once the inventory has been filed with and approved by the court, you will be ready to begin making distributions out of the estate. In our next post we will cover distributing and concluding matters involving the decedent’s estate.