Soon after receiving the plan to complete the estate income tax returns, I began to execute the plan. As described in the article The Estate Income Tax Returns: The Plan to Complete the Returns, the plan, in part, involved distributing the proceeds of the rental property sale and paying out tax deductible expenses. However, before I could begin to execute the plan, I had to complete the following tasks:

• Mail W-9 forms to beneficiaries refusing to give their social security number through email or by phone.
• Contact the two charities for their tax-id numbers.
• Contact the attorney and the tax professional for invoices.

So, after requesting the information, there was nothing left to do but to wait for the information to arrive.

Begin to Execute the Plan

About a week after completing the tasks mentioned above, all the requested information arrived. So, I was able to complete the following tasks to carry out part of the plan:

• Update the List of Beneficiaries with the social security numbers and tax-id numbers.
• Paid the attorney fees for the month of July.
• Paid the fee for the tax professional.

After paying out most of the tax deductible expenses, there remained only one tax deductible expense left: executor compensation. Since the executor compensation was set by the will, paying out the expense had to occur in the distribution. Therefore, I had to calculate the distribution using only the proceeds from the rental property sale to determine executor compensation.

Calculating the Distribution

Unfortunately, the will provided a complex distribution formula in that not all beneficiaries will receive the same amounts. In addition, the formula consisted of percentages and shares. So, a few trial drafts were necessary to get the right amounts. After correctly figuring the amounts, I had the attorney and the tax professional look over the draft. Eventually, they both approved of the calculated distribution which later served as a template for future distributions. After receiving the approval, I wrote the distribution checks.

However, before mailing the distribution checks, I sent a group email to the beneficiaries. The email was to inform the beneficiaries of the distribution checks that included only the proceeds from the sale of the rental property. In addition, I mentioned that the distribution was part of a tax strategy to reduce the tax liability of the estate. Since the beneficiaries expected to receive very little, after that email, they probably thought they would receive pennies.

The day after sending the email, the distribution checks were in the mail. After mailing the checks, I felt confident that once the beneficiaries received their checks, they would be pleasantly surprised.

Compensated at Last

Fortunately, while serving as executor, the will provided compensation for the executor. The executor was to receive an extra share for administering the estate. So, when I was calculating the distribution, I was also calculating my compensation. Once approved by the attorney and the tax professional, I was able to transfer both the bequest amount and the compensation amount from the estate account to my personal account, which was in the same bank. In addition, the amount representing my compensation was the final tax deductible expense that I had to pay out. So, with all the tax deductible expenses paid out and the distribution completed, the tax professional could complete the estate income tax returns, which would complete the entire plan.

The Fall Out

About a week after sending out the distribution checks, the beneficiaries seemed surprised and elated. The beneficiaries, including the belligerent beneficiary, sent emails my way thanking me for the effort and the distribution they received.

Although I knew the beneficiaries would experience a pleasant surprise, I wasn’t expecting the accolades given to me. So, the appreciation given to me surprised me and gave me a sense of accomplishment. In addition, the realization that only two tasks remain to close the estate added to the elation and the feeling of accomplishment.

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