Once approved as executor, the executor needs a coherent administration plan before closing the estate assets. Without such a plan, costly oversights occur as described in the article Understand the Details of the Estate.

The Need for an Administration Plan

The purpose of the administration plan is to provide an overview of the estate on the assets and expenses. Within this overview, the executor can determine if there are enough assets to cover the expenses of the estate and to gather important details. Finally, once the executor understands the details, the executor will know how to proceed in closing the assets.

Building the Administration Plan

To develop this plan, the executor should use the Inventory of Assets and the will. The Inventory of Assets provides a list of assets and estimated values of those assets. The will provides named beneficiaries or instructions for the handling of the assets. Using the Inventory of Assets and the will, the executor must perform the following tasks:

1. The executor must review the type of assets in the estate. Each asset type has different requirements when closing the asset. So, it’s important for the executor to understand the asset, the value of the asset, and the expenses associated with the asset when closing, if any.
2. The executor must determine if there are any beneficiaries associated with each asset. This is important because beneficiaries have a direct effect on how the executor handles the asset. The executor remains in control of assets that have beneficiaries of specific assets listed in the will. Conversely, an asset that has a beneficiary listed on the asset, such as an IRA, is not part of the estate and the executor must transfer the asset to the beneficiary.
3. The executor must anticipate expenses associated with the assets of the estate. If the executor has to sell a house, the executor must estimate expenses related to the sale of the house. The house may need  repairs or upgrades to pass a home inspection; therefore, the executor must get estimates for that expense.
4. The executor must realize that at some point they will need the services of a professional. Therefore, estimates for professional services apply to the administrative plan.
5. The executor should provide a little cushion for unforeseen expenses such as legal costs related to a belligerent beneficiary.

The Big Picture

If the executor can adequately perform the above tasks, then the executor will have a solid picture of the estate. The executor will know if there are enough assets to cover the expenses – which include all debts, taxes, and administrative expenses – and will know enough about the details to proceed in closing the assets of the estate. With a coherent administration plan in hand, the executor should experience a smooth Administration.

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Suggested Reading:

The Executor’s Guide – The Executor’s Guide is a good reference for Common Executors. The book will guide a common executor on how to prepare to run an estate administration. It worked well for me.