Quite often, one assumes the role of executor (or administrator) for an estate without realizing many of the complexities associated with being appointed a fiduciary of an estate by the Surrogates’ Court. I usually explain to clients that being an executor of an estate is no different than being a CEO for a corporation. You manage the day-to-day activities for the estate from start to finish and become the responsible party to ensure that the administration of the estate is carried out properly.
While this may seem like a daunting task for many, it can be a manageable responsibility if certain persons are enlisted to assist with the administration of the estate. While the executor has the final authority and is the only person who can act on behalf of the estate, the utilization of certain qualified professionals can greatly assist along the journey.
Hire An Estate Lawyer
First and foremost, every estate should have an attorney retained. Whether the attorney has been representing the estate from the outset or not, it is important to have a qualified estate lawyer because legal issues undoubtedly will arise even when things seem to transition smoothly. There will come a point during the estate administration wherein creditors may need to be contacted, government agencies (i.e. IRS, Social Security Administration) may reach out, and beneficiaries will be awaiting their share of the estate.
Double Check All Paperwork
This is where an estate attorney will be critical to be sure all proper paperwork has been submitted, documents filed, and necessary releases are obtained from said beneficiaries to protect the executor and to be sure the executor is properly conducting themselves. An estate attorney is very important and can help counsel the executor or fiduciary to avoid the quite common pitfall of “self-dealing”. This practice occurs often when a fiduciary is also a beneficiary and should be avoided at all costs.
Hire A Qualified CPA
Furthermore, any executor must have a qualified CPA engaged because any estate will need to file final income tax returns on behalf of the decedent, file any IRS 1041 returns (estate/trust income tax returns), and possibly file federal or New York State estate taxes. A qualified CPA should be well aware of any filing deadlines to ensure the proper filing and payment of taxes take place, and to avoid any unnecessary penalties imposed on the estate.