Setting up the Estate Reserve and the Final Distribution

17 Monday Jul 2017

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Attorney, Beneficiaries, estate account, Estate Administration, Estate Closing, Estate Reserve, Executor, Final Account, Final Accounting, Final Distribution, Formal Probate Process, Miscellaneous Expenses, probate, Schedule B, Tax Professional, Unexpected Expenses, Will

When completing Schedule B in the final accounting, setting up an estate reserve and the final distribution becomes necessary. As mentioned in the article Closing the Estate: Complete the Final Accounting, Schedule B takes more time to complete than Schedule A. The reason is that the executor has to step out of the final account to complete the following tasks:

Set up an estate reserve that will pay expenses beyond the closing of the estate.
Calculate a final distribution using the remaining funds in the estate account.

Since the estate reserve and the final distribution represent future expenses of the estate, they become part of Schedule B. Also, because the two items are future expenses, planning and estimating future expenses becomes necessary. As a result, the executor may have to delay completing Schedule B for at least a couple of days.

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Closing the Estate: Complete the Final Accounting

10 Monday Jul 2017

Posted by Robert Dowling in Estate

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Assent Forms, Attorney, Bank Fees, Bank Statements, Beneficiaries, Bookkeeping System, Close the Estate, estate account, Executor, Final Account, Final Accounting, Income and Expense Report, Income and Expenses, Inventory of Assets, Record Keeping System, Schedule A, Schedule B, Schedule C

After updating the estate account and completing the final Inventory of Assets, it was time to complete the final accounting. As mentioned in the article Closing an Estate in a Formal Probate Process, the attorney sent me three schedules that made up the final account. With instructions to review the schedules, I began to look them over. During the review, the schedules were already organized by category. Additionally, provided values, presumably by the attorney, were on Schedule A and Schedule B. Since the attorney warned me that values would appear, this didn’t concern me. Also, although the categories surprised me a little, the attorney would explain the categories the next day. So, after my review, the task to complete the final accounting was ready to begin.

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Closing an Estate in a Formal Probate Process

19 Monday Jun 2017

Posted by Robert Dowling in Probate

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Assent Forms, Attorney, Beneficiaries, Common Estates, Distribution, Estates, Executor, Final Account, Final Distribution, Formal Probate Process, Informal Closing, Inventory of Assets, Partial Distribution, Probate Court, Schedule A, Schedule B, Schedule C, Simplified Probate Process

When closing an estate, some states that use a formal probate process, allow for an informal closing for common estates. These states simplified the probate process for estates that are straightforward; not complicated or contested. Fortunately, Massachusetts is one of those states. In Massachusetts, closing an estate using the simplified probate process involves the following tasks:

Complete a final Inventory of Assets.
Using the Inventory of Assets in the final accounting, complete the final accounting.
Under cover of an assent form, send copies of the Inventory of Assets and the final accounting to each beneficiary.
After receiving the signed assent forms from each beneficiary, the executor must sign the form called Account (MPC853). The signed Account form, with the original Inventory of Assets and final accounting attached, essentially closes the estate.
Make the final distribution to the beneficiaries.

In Massachusetts, the simplified probate process allows straightforward, common estates to avoid the probate court when closing an estate. Instead, the approval of the Inventory of Assets and final accounting from all the beneficiaries informally closes the estate.

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Completing Preliminary Tasks to Close the Estate

12 Monday Jun 2017

Posted by Robert Dowling in Estate

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Attorney, Bookkeeping, Creditors, decedent, estate, estate account, Estate Administration, Estate Documents, Estate Property, Executor, Final Account, Final Accounting, Financial Statements, Fiscal Year, Inventory of Assets, Record Keeping, Schedules

On August 22, 2013, with nothing much left to do, I began preliminary tasks to close the estate. In fact, ten days prior, I was working on preliminary tasks until the belligerent beneficiary disrupted the process as described in the article One Last Gripe from the Belligerent Beneficiary. So, on August 22nd, it was a good time to pick up where I left off. On this day, I was finally able to update the initial distribution amounts to the estate account.

Although things were slow at this point, I knew I would be busy in the upcoming month. On September 1^st, two events would occur:

The one year anniversary of the decedent’s death is the end of the fiscal year for the estate. With all the property settled, this date sets a deadline for the estate income taxes to December 15, 2013.
The time for creditors to make a claim against the estate would expire. After this date, creditors had no recourse.

Basically, the two events clear the way to close the estate. Since the estate income taxes were off the estate, the only task left was to close the estate. So, collecting documents and financial statements occupied my time for the rest of August in preparation for the final accounting.

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One Last Gripe from the Belligerent Beneficiary

05 Monday Jun 2017

Posted by Robert Dowling in Estate

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Attorney, Belligerent Beneficiary, Distribution Checks, Estate Administration, Estate Attorney, Executor, Final Accounting, Final Inventory, Probate Rules

Three days after mailing the distribution checks, the belligerent beneficiary made one last gripe. Unfortunately, the belligerent beneficiary made the mistake of contacting my attorney to complain. Since the attorney was under instructions to refuse direct contact from the beneficiaries, the attorney referred the gripe to me. As a result, the effort by the belligerent beneficiary to avoid contact with me failed. Anyway, the attorney informed me by email that the belligerent beneficiary had the following complaints about the distribution:

The beneficiary didn’t understand why the distribution happened early: that distributing early was against probate rules.
The beneficiary wanted to know why a final inventory and a final accounting wasn’t provided along with the distribution.
Since the beneficiary didn’t know about the distribution, the beneficiary felt slighted.

After reading the email, it was obvious to me that the belligerent beneficiary didn’t read the email sent to all beneficiaries about the distribution as mentioned in the article Estate Income Tax Returns: Execute the Plan. At first, I thought it was just an oversight that led to a misunderstanding. However, after further thought, it felt like one last gripe. After claiming the estate broke probate rules and not sending reports, this wasn’t a misunderstanding. To me, it was typical behavior from the belligerent beneficiary displayed throughout the entire administration. So, in reply to the attorney, I assured the attorney that I would handle the complaints appropriately.

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Why is Calculating a Distribution from a Will Necessary?

22 Monday May 2017

Posted by Robert Dowling in Planning Tips

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Attorney, Beneficiaries, Common Estate, Distribution Formula, Distributions, Estate Planning, Executor, Final Accounting, Formal Probate Process, probate, Tax Professional, Will

Typically, calculating a distribution from a will, in a common estate, is a result of poor estate planning. If an executor needs an analysis pad to figure out a distribution involving many beneficiaries, the estate plan has the following flaws:

There are too many beneficiaries in the estate plan.
The estate plan has a complicated distribution formula.

In the article The Estate Income Tax Returns: Execute the Plan, calculating the distribution written in the will forced me, as executor, to use an analysis pad, then an excel spreadsheet. The distribution formula consisted of twenty beneficiaries receiving different amounts of property calculated in percentages and shares. In fact, the complicated distribution formula took me a few drafts to get to a final draft. After completing the final draft on an excel spreadsheet, to make sure the distribution calculation was accurate, I emailed the spreadsheet to my attorney and the tax professional. The professionals reviewed the final draft and approved the distribution. Finally, after the review, I was able to distribute the property to the beneficiaries. In addition, the spreadsheet of the final draft became the template for the next distribution.

Although the distribution worked out well, an executor of a common estate should never have to calculate a complicated distribution. Therefore, calculating a distribution from a will should rarely be necessary.

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The Estate Income Tax Returns: Execute the Plan

15 Monday May 2017

Posted by Robert Dowling in Estate

≈ 1 Comment

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Attorney, Belligerent Beneficiary, Beneficiary, Distribution Checks, Distribution Formula, Distributions, Estate Income Tax Returns, Estate Property, Executor Compensation, List of Beneficiaries, Partial Distribution, Rental Property, Social Security Numbers, Tax Planning, Tax Professional, Tax Strategy, Tax-Deductible Expenses, Tax-Id Numbers, W-9 Form, Will

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.

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The Estate Income Tax Returns: The Plan to Complete the Returns

08 Monday May 2017

Posted by Robert Dowling in Estate

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Attorney, Beneficiaries, Beneficiary, Charitable Deductions, charities, Deductions, Estate Income Tax Returns, Fiscal Year, Tax Planning, Tax Professional, Taxable Income, Will

On July 8, 2013, the plan to complete the returns came into focus. On this day, the tax professional asked for a copy of the will to complete the planning. At the time, the tax professional was looking into charitable deductions and if the will provided for them. So, I sent a copy of the will through email as a PDF file. In addition, in the same email, I outlined why I wanted the estate to pay the estate income tax. After sending the email, I knew the plan to complete the returns was near completion.

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Handling Found Property from a Different Estate

27 Monday Mar 2017

Posted by Robert Dowling in Estate

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Attorney, Beneficiaries, Common Estates, Distribution, Distribution Plan, Estate Administration, Estates, Executor, Forgotten Assets, Found Property, Holographic Will, Inventory of Assets, personal possessions, Property

In some common estates, executors may find themselves in unique situations such as handling found property from a different estate. Early in the estate administration, while sorting through possessions, my Uncle’s stepdaughter found a large, bulky envelope. In the envelope was a blue topaz ring and fifty-four hundred dollars in cash. As the stepdaughter handed me the property, I asked, “Where did you find this?”

The stepdaughter replied, “I found the envelope” – as she looked towards a box – “on top of the box near the stairs.”

So, I quickly went over to the box to sort through the contents. The box contained property and documents associated with the estate of my Uncle’s cousin in which my Uncle served as executor. Apparently, the cash and the ring were the contents of the cousin’s safe deposit box. Moreover, my Uncle forgot to include the property in the cousin’s estate for distribution before closing the estate. So, confused about how to handle the property, I put the matter aside until I could discuss the dilemma with my attorney.

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Moving the Personal Possessions Reserved for the Belligerent Beneficiary off the Estate

06 Monday Mar 2017

Posted by Robert Dowling in Estate

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Asset Settlement, Attorney, Beligerent Beneficiary, Closing, estate, Estate Administration, estate home, Estate Rental Property, Executor, Gifts, personal possessions, The Battle of the Shaving Mug

After the closing, it was time to move the personal possessions reserved for the belligerent beneficiary. Once the estate rental property closed, there were no remaining assets to settle. Therefore, the closing completed the asset settlement phase of the estate. At this point, I thought it would be a good time to wrap up business with the belligerent beneficiary. As described in the article How to Handle a Belligerent Beneficiary, I sent an email to the belligerent beneficiary. The point of the email was to give the belligerent beneficiary one week to collect the reserved possessions, and that I would call the beneficiary to set the day of the exchange. After sending the email, I was hopeful that the belligerent beneficiary would accept the reserved personal possessions. Moreover, by accepting the personal possessions, the possessions reserved for the belligerent beneficiary would finally be removed from the estate.

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The Common Executor

~ A Journey into Estate Administration

Tag Archives: Attorney

Setting up the Estate Reserve and the Final Distribution

Closing the Estate: Complete the Final Accounting

Closing an Estate in a Formal Probate Process

Completing Preliminary Tasks to Close the Estate

One Last Gripe from the Belligerent Beneficiary

Why is Calculating a Distribution from a Will Necessary?

The Estate Income Tax Returns: The Plan to Complete the Returns

Handling Found Property from a Different Estate

Moving the Personal Possessions Reserved for the Belligerent Beneficiary off the Estate