This material is focused on the U.S. probate process and how to avoid probate. However, the tools and suggestions in this content could be helpful for everyone. The purpose of this guide is to prepare an executor, family members and friends for your passing. We hope the material will help you start conversations and make preparations with your legal and financial advisors.
Vaults Planning Checklist
HereToday enables you to secure and share estate plans, medical directives, digital assets, and legacy with your executor, beneficiaries and heirs. We do this by providing you with the industry’s leading encrypted, bank-level security vaults.
Visit our Documents and Planning Checklist for an overview of files you can add to your vaults. With each uploaded document you can share the file with an executor, estate planner, financial advisor, insurance agent, and family members. Like everyone’s life, each account is unique. You can easily customize the vaults and folders to suit your needs.
A properly prepared living trust could help your family avoid the public, costly, and time-consuming court processes of probate. Learn more about living trusts.
You and your executor should familiarize yourself with the probate process (also referred to as estate administration.) Probate is a procedure where your will and the executor are legally validated. Additionally, probate will establish the value of your estate, as well as substantiate the distribution of assets after all debts have been paid. Upon your passing, the executor will need multiple “original” copies (~10) of your death certificate. These copies will be presented to most of the entities listed in this guide. A death certificate is required to legally change your status in their files. We recommend you upload a copy of your will to the Vault’s Legal folder.
Each state has their own laws pertaining to probate. Depending on the size of your estate, the executor may have to go through the full probate process. We highly recommend the executor engage the services of an estate lawyer to help navigate probate.
Basic Steps of Probate
1. File a Petition. The executor will file a petition with the probate court in the county of your primary residence. They will ask the court to legally acknowledge them as your executor.
2. Notify Creditors. The executor must close any outstanding debts. As part of this process the executor will publish a notice of your passing in the local newspaper. The notice will be addressed to creditors, announcing that your estate has started probate proceedings. Typically, the notice will remain in the newspaper for a few weeks, giving creditors sufficient time to make any claims.
3. Probate Bonds. In some instances state law may require the executor to post a probate bond. A probate bond is a type of court bond that ensures your wishes are carried out ethically and honestly. If an error does occur, the bond makes the executor compensate the beneficiaries for any money lost. Probate Bonds are also called Fiduciary Bonds. Typically, the bond fee will be reimbursed from the estate.
4. Estate’s Value. The executor is required to determine the value of your estate. A curated list of your assets subject to probate will be presented to the court. You can provide assistance to your executor by uploading a list of assets to the Vault. If you are survived by a spouse who jointly owns your assets, these properties may not need to go through probate or get calculated in the estate’s value. Your spouse and the executor should consult an estate attorney for guidance.
5. Establish a checking account. The executor will be writing checks to cover incoming bills, taxes, court costs, and eventual disbursement of estate funds. We recommend the executor establish a new checking account to manage debits, as well as credits from the sales of your assets. Your estate may also receive funds from outstanding paychecks, interest payments from investments or other sources, all of which should be deposited in the new checking account.
Fund sources to consider:
6. Debts and Taxes. The executor will settle any debts due from the estate, including paying your final income tax. We suggest leaving a list of financial sources in your Vault’s Financial folder, which will assist the executor during this process. In the event your assets do not cover the estate’s debts, the court will determine the order in which creditors get paid. Some creditors may not receive anything.
7. Asset Distribution. Your executor will manage and track all debts and liabilities. Upon settling the estate’s debt obligations, a report outlining all payments will be submitted the court. Next, the executor will file a petition requesting permission to distribute any remaining assets to the beneficiaries and heirs. Your will should provide guidance to the proper distribution. If you don’t have a will the property will get passed to family members according to your state’s inheritance laws.
8. Ending the Probate Process. Once the asset distribution is complete, your executor will submit a request to the court asking to be legally released from their duties. The formal request will include a detailed accounting document disclosing the debits and credits of the estate. Only upon court approval is the executor released from their duties.
Informing Family, Friends, and more
The executor will most likely be among the first people to know of your passing. As part of their duties the executor should notify family and friends in a timely manner. This will be one of the most difficult conversations to have with your family. Most certainly the executor will also be processing the news themselves.
In addition to notifying family and friends the executor should also inform your employer, community members and associations, and business professionals like a financial advisor, insurance agent and attorney.
In addition to notifying family and friends, the executor will need to inform your employer and colleagues of your passing. As you spend a significant amount of your life with co-workers, these members become a second family. Not only will they want to send best wishes and condolences to your family, but the company might also owe the estate earned wages, insurance claims, or pension benefits. We recommend uploading a list of your company’s HR department and management contacts to the Vault’s Legal or Financial folders.
In addition to notifying your work colleagues, we also suggest the executor inform your community affiliations. Please upload a file containing contacts to your place of worship, community memberships, clubs, alumni, and other locations of importance in your life.
The executor will need to validate your will. If possible, it’s best for them to connect with the lawyer who drafted the document. The contact details to your attorney and a copy of the will should be uploaded to the Legal folder. Going forward, the lawyer can provide guidance and support to your executor.
As your estate enters probate the executor will have to compile a list of known bills and creditors. Among their first actions is notifying one of the three credit bureaus (Equifax, TransUnion, and Experian) of your passing. Once informed, the bureaus will send a list of your credit cards and loans.
In addition to any credit card bills or loans the executor will need to cancel your recurring monthly and annual subscriptions to services. As an example you might subscribe to Netflix, Amazon Prime, Hulu or other media outlets, or mobile phone contract. The list of recurring payments can be extensive and hard to track down; as such, we suggest writing down all your memberships and subscriptions. This outline can be uploaded to the Vault’s Financial folder.
The estate will immediately incur expenses that your executor will have to manage. These bills include funeral, mortgage, insurance, income taxes, property taxes, and attorney’s fees. The estate will reimburse the executor for any out-of-pocket expenses generated during probate.
Debt and Beneficiary Liabilities (Paying the Estate’s Debts)
Your beneficiaries and heirs will not be held responsible for paying off debts. The executor will make a ledger of your estate’s debts and assets. Should the estate have more debts than assets, it’s known as being insolvent. In this situation the probate court will decide which debts are paid. Assuming your assets exceed any debts, the estate will pay off any obligations. In some instances the executor will be required to sell assets to generate funds. All debts should be paid prior to your beneficiaries or heirs receiving funds.
It’s the responsibility of your executor to understand the contents of your will. If you’re comfortable reviewing the will with your executor now, it could help the estate move through probate more efficiently.
Prior to submitting the will to probate court, we suggest your executor validate the will with the attorney who prepared the document.
Four main requirements of a valid will:
- The will must have been executed with testamentary intent;
- The testator must have had testamentary capacity:
- The will must have been executed free of fraud, duress, undue influence or mistake; and
- The will must have been duly executed through a proper ceremony.
Communication with Beneficiaries and Heirs
The executor can share a copy of the will to your beneficiaries and heirs. During this difficult time it’s vital your executor, family members, and friends remain aligned and communicate with each other on a regular basis.
Original Document Submission
While a copy of your will is securely stored in the Legal folder, the executor is required to submit the original document to the local probate court or registrar of wills office.
Your designated executor will be responsible for managing your mail, online accounts and digital assets, bank accounts, credit cards, insurance plans, and memberships to various associations.
Almost everything about your life requires a digital account. However you can’t forget about the United States Postal Service. Your mail should be forwarded to the executor’s mailing address or a P.O. box established for the estate.
All of your online subscriptions, memberships, recurring payments, and social media accounts will need to be deactivated. Additionally, the executor could be required to log into your online accounts to deactivate the property’s utility services, such as internet and cable television.
During probate it’s suggested the executor leave the heat, water, and electricity turned on. Should the property need to be sold, or if it’s transferred to a beneficiary or heir, these services will ensure the property remains in top working condition.
Read about the Digital Afterlife and RUFADAA legal requirements before uploading your list of devices, online accounts, usernames and passwords in a vault. Please follow the RUFADAA guidelines and include clear instructions in your will.
Your executor will be legally responsible for managing and closing your bank accounts during probate. If you have a joint account, the co-owner will need to remove your name.
Without a beneficiary named to an account the bank will temporarily freeze all accounts until the estate enters probate. At this time, your executor will create a new account to authorize the executor access to all the estate’s assets. The funds from your account will transfer to that new account.
Among the executor’s first actions is to notify one of the three credit bureaus of your passing. The bureaus include Equifax, TransUnion, and Experian. These services will put a freeze on your accounts and send a report of all credit cards and loans to the executor. Next, the executor will contact and close each of these accounts, excluding any shared cards you have with another person. Authorized users are not the same as shared, joint account holders. If you share a card with another entity, your name will be removed from the account.
In the Vault’s Financial folder add a list of your bank accounts, investment funds, credit cards, or other pertinent details that will aid your executor.
The executor will notify insurance companies to cancel your various insurance policies, including:
- Auto insurance
- Health insurance
- Homeowners insurance
- Life insurance
While in probate the homeowners and applicable policies attached to assets should remain open. The estate will cover insurance premiums until the assets are distributed and probate is closed. We suggest uploading a file to the Vault’s Insurance folder that contains a list of your policies, contact names, and other information helpful to your executor.
Many people think of their assets as being property, vehicles, and financial accounts (bank accounts, stocks, bonds). You should also include jewelry, furniture, artwork, collections, and more among your assets. We recommend you upload a list of your assets to the Vault. Most insurance companies require a policy rider for special items of value which in some cases requires an independent appraisal. Consider photographing these special items. A good idea is perform a video walk-thru of your house(s) to document furniture, artwork, etc. to submit with any insurance claims. This list will help the executor settle your estate in a timely manner. Assets are inherited in the following manner:
- Named in the will
- Designated beneficiary
- Jointly-owned, or
- No named beneficiary
With your list of assets in hand the executor will have to assign a monetary value to each item. We recommend the executor hire a 3rd party professional to assist with the appraisal process. Not only will this help the probate process, but it also alleviates any potential misgivings from beneficiaries or heirs.
If an asset is going through probate, typically, any of your beneficiaries or heirs receiving an asset will need to provide a copy of your death certificate. They will also need to provide a legal document validating their claim as the asset’s new owner. The executor will provide guidance to the intended recipients.
Should you pass away with an outstanding mortgage or debt on an asset, like a car or recreational vehicle, your beneficiaries or heirs of these assets will be responsible for the funds owed. This is applicable whether the assets go through probate or not.
If you own a property, or have a mortgage, leave a list of contacts and detailed instructions on how to best manage the property. This information should be uploaded to the Vault’s Financial folder.
- Name of the mortgage lender
- Lender contact details
- Upload a copy of your mortgage in the Vault
- Contacts to a Homeowners Association (HOA)
If you’re renting a property, provide contact details to the landlord for your executor and family. It’s best to leave a copy of the lease in the Vault’s Financial folder. The executor should notify the landlord of your passing as soon as possible.
- Name of your landlord and contact details
- Upload a copy of the lease to your Financial folder
- Highlight your security deposit. These funds will go to the estate; in some cases, the funds can cover any outstanding rental expenses.
Securing your Residence
Upon your passing, the executor should take the following precautionary measures to secure the property.
- Inform your mortgage lender or landlord
- Notify housekeeping, maintenance, and service teams
- Remove or secure all valuables within the home
- Replace all entry door locks
Everyone’s tax situation is different. Although tax preparation during probate is typically straight forward, you can help the executor by preparing a document outlining intricacies of your particular estate. Upload this document to your Vault’s Financial folder.
Your beneficiaries will most likely be taxed on assets they receive, unless a trust exists. As each tax situation is unique, and state laws can vary, it’s recommended the executor seek professional advice from a tax lawyer or accountant.
Filing Income Taxes
The executor will file an income tax return on your behalf using the IRS Form 1040. They will also file state income tax using your state’s standard tax form. Tax forms filed will cover the period from your last filed income tax return.
If the estate generates income after your passing, such as income earned from a rental property or business, the executor will need to file a separate tax return. In this instance, the executor will file a Form 1041. The income earned by the estate is NOT an “estate tax.”
If your estate is over a particular size the federal government, including several states, could levy an estate tax. We recommend the executor consult an accountant or tax lawyer to determine if estate tax returns are needed.
Most often beneficiaries or heirs do not pay any taxes on inheritances. If possible, talk to your beneficiaries about the possibility of paying taxes. As always, we recommend the executor use an accountant or tax lawyer to avoid any unforeseen issues.
Upon your passing unscrupulous people could try to compromise your personal information for their own gains. Here are some tips for the executor to protect your data and estate:
1. Credit Bureaus. One of the three major credit bureaus (Equifax, TransUnion, and Experian) should be notified of your passing. These bureaus will mark your account as deceased; additionally, your Social Security number will be frozen to prevent unwanted attacks from criminals. One of the earliest legal requirements of your executor is to notify the Social Security Administration (SSA) of your passing. Once notified your SSA benefits could be paused.
2. Financial Account Safety. The executor should notify your financial institutions identified/listed in your Vault as quickly as possible. Please note that bank accounts will become frozen upon notification of your passing. Any recurring or automated bill payments will not get processed from this time forward.
3. Vigilance. It’s up to the executor to protect your estate. This person should be cognizant of the ramifications for posting and sharing your personal information. Have the executor review any continuing credit card and financial statements each month the accounts are in probate. Any suspicious activity should be reported immediately.
Items of Emotional Significance (Heirlooms and Keepsakes)
Your will should leave detailed instructions on how you want assets and personal belongings to be distributed among beneficiaries. Not all of your belongings will have substantial monetary value; however family members and friends may cherish certain items for their emotional, sentimental value. If possible, have conversations with your beneficiaries and heirs now. Items can be earmarked for individuals; however the executor cannot legally distribute items until the estate is probated. Ask members of your family to request items and explore why those particular heirlooms mean so much to them. You can curate a list of heirlooms and store the document in the Legacy Vault.
Final Wishes and Preparation
You can upload your final wishes, funeral planning instructions, or celebration of life plans in the Legacy Vault’s End-of-Life folder. You can also create a new folder specifically for your preferred preparations and events. Planning your own service can provide peace of mind to your loved ones.
Celebration of Life
An event focused on sharing your life’s stories, experiences, and impact on family and the community.
If you haven’t left instructions for your executor, a funeral home can suggest a wide range of services and provide guidance during this difficult time. The executor should feel comfortable asking questions about service options, costs, and legal rights.
Paying for the Service
If you did not specifically set aside funds for your service, the executor can legally use estate funds to cover the expense. Typically, any up-front expenses incurred by the executor can be reimbursed from the estate.
The executor can write a tribute of your passing and remembrance of life. An obituary can also provide details of your funeral service, celebration of life, or where to send charitable donations. To help your family through this difficult time we suggest uploading any final wishes and instructions to the Legacy Vault’s End-of-Life folder.
We hope this family preparation and planning guide provided a brief overview of the process and requirements of closing an estate. HereToday was created with the purpose of establishing a single source of information, documents, and contacts for your executor. You can secure and share everything from estate plans, medical directives, device login details, passwords, online accounts and digital assets, to family stories, keepsakes, recipes, music playlists, photos and more.
HereToday is not a licensed healthcare provider, medical professional, law firm or financial advisory firm. Please consult a professional when preparing any legal, medical or financial document.