Preparing for Probate
If you have been named as the executor of someone's will, have an attorney review the will and advise you just what you can or cannot do on the estate’s behalf. Most wills specify this. You will need several copies of the death certificate in your possession to provide to insurance companies and other entities that might hold the deceased's assets. Open a bank account for the estate and purchase a small ledger for yourself so you can keep track of any expenses you might pay out of your own pocket. In all likelihood, the estate will reimburse you later.
Collecting Liquid Assets
A liquid asset is one that is in cash form and does not have to be sold or “liquidated” to raise funds for the estate like real estate or automobiles would be. Liquid assets include checking, saving and investment accounts but could also be debts or rents owed to the deceased at the time of his death. When the estate enters the probate process, it is the executor’s responsibility to collect them if they exist and place the funds in the estate's bank account. The executor should also contact the deceased’s employer to find out if there are any death benefits due the estate. If the deceased had life insurance, the executor must find out if his estate is the beneficiary or if he specifically designated an heir. If he designated an heir, the proceeds bypass probate. Otherwise, the executor is in charge of collecting the payment and placing it in the estate’s bank account.
Preserving Nonliquid Assets
Next, an executor must secure all nonliquid assets. This process starts with taking an inventory of what the deceased owned, then placing everything of value in a safe deposit box or a similar safe location. If any of the items are insured, the executor should also make sure policies are current because it is his responsibility to make sure they do not lapse.
Paying Debts, Expenses and Beneficiaries
Once all assets are identified and liquid funds are accumulated in the estate’s account, an executor begins disbursing everything. The deceased’s creditors must be paid whatever she owed them when she died. Tax returns must be filed, both on behalf of the estate as well as the deceased’s personal returns, and any taxes due must be paid. If any nonliquid assets have to be sold to do this, it is the executor’s responsibility to oversee the process. When all debts, taxes and expenses of the estate -- such as appraisal fees and court costs -- have been paid, the executor distributes the remainder of the estate to the deceased’s beneficiaries. It is a good idea to get receipts from the beneficiaries, acknowledging that they got their bequests.