As an executor, your responsibility is to identify all assets. One of your first priorities will be to locate and secure the belongings and finances of the deceased person to prevent any loss or damage. These assets may include bank accounts, real estate, investments, insurance policies, and valuable items such as jewelry and artwork. The following is not an exhaustive list; it has grown out of our experiences with assisting executors.
Life Insurance Policies
Life insurance benefits can provide financial security for the decedent’s loved ones and other beneficiaries they’ve named. Policy distributions are generally tax-free sources of funds. And they typically can be accessed more quickly than financial accounts that need to be probated.
It is not uncommon for people to forget about the existence of life insurance policies. An executor or beneficiary might not submit a claim because they are unaware of these policies or cannot find their records in piles of paper or old filing cabinets.
Avoiding a Negative Outcome
Before Death:
- Ask the person if they have life insurance and where the documentation is kept.
- If you find life insurance policies, review them with the person to ensure the beneficiaries are up to date. Remove people who are no longer intended to receive the insurance proceeds, such as deceased people, ex-spouses, etc. Add new people such as new spouses or partners, additional children or grandchildren, and any other new beneficiaries. Contact the insurance agent for advice and to make changes.
- If the person remembers purchasing life insurance but doesn’t have the policy information, try to find it. Search their financial records for payments to an insurance company, contact previous places of employment and unions, or review their paystubs for evidence of a premium payment deduction if they are still employed.
- If the person lives in New York state, you can submit a request to find a policy through the Department of Financial Services’ Lost Policy Finder. They ask that you exhaust all other possibilities, like those listed above, before submitting a search request.
- Nationally, the National Association of Insurance Commissioners (NAIC) assists in tracking down unclaimed life insurance policies.
After Death:
- Take the steps listed above to find a policy.
- Once a policy is identified, work with the beneficiary(s) to submit a claim.
Unclaimed Funds
It is surprising how many people have funds that are held by states because of account inactivity or abandonment. This is called escheatment. The rules for abandoned property vary from state to state. In New York State, the dormancy period for bank accounts is three years, whereas bank accounts in Florida are escheated after five years.
Read our article, “Do You Know Where All Your Assets Are?” for more in-depth information.
Avoiding a Negative Outcome
Before Death:
- Since it’s easier to claim escheated funds while someone is alive and can get a document notarized, you should periodically check abandoned funds’ websites. In New York State, you can search on the State Comptroller’s Unclaimed Funds webpage.
- Obtain and securely record the person’s identifying information that will be needed, most importantly, their Social Security number and date of birth.
After Death:
- If you identify unclaimed funds after someone dies, you will need a death certificate, current Letters Testamentary, a Table of Heirs, and proof of address associated with the assets to process a claim.
- Inform anyone who is cleaning out papers to hold onto at least one proof of each prior residence in case it is ever needed to claim funds associated with that address.
Messy or Unknown Assets
Assets can be anything from stocks to real estate, annuities, and various other investments. Your task will be much easier if they are organized, with up-to-date paperwork. But this is often not the case.
Many people have stock holdings outside of brokerage accounts or in other countries. This may result from an inheritance, employer distributions, special purchase situations, earlier residency, etc. In addition, annuities and retirement plans from past jobs are often forgotten.
You may want to consult a financial advisor for help. For example, they may be able to assist with the considerable amount of paperwork required by custody agents to transfer complicated stock assets. Or you might want them to help acquire a hard-to-obtain medallion signature guarantee that may be required on some forms. A financial advisor is also a good resource for helping to consolidate assets.
Avoiding a Negative Outcome
Before Death:
- Encourage the owner to open a brokerage account if they haven’t already.
- Identify all stock holdings and attempt to transfer them to the brokerage account.
- Research the cost basis of the stock at the time of purchase for any investments not subject to a stepped-up basis.
- Identify and list all annuities, along with contact information, value, cost basis, tax ramifications of liquidation, if they are actively paying out or not, and if there are beneficiaries. Discuss with a financial advisor whether the annuities should be left to accumulate, surrendered, or activated.
- Make sure that real estate is titled properly to facilitate ease of transfer and in accordance with estate planning objectives. Should the real estate be jointly owned by spouses? Should its ownership be transferred to a trust? Has the deed for property inherited from parents been updated?
After Death:
- Review tax returns for income and capital gains associated with savings and investments and for property tax payments.
- Peruse bank statements and checkbook registers to identify sources of income from annuities or “loose” stock holdings.
- Inspect insurance policies for evidence of valuables.
- Look for bills or payments for safe deposit boxes and storage of art, wine, and other valuable items.
- Search through old files and records.
Estates with Limited Assets
If a decedent has limited assets that do not require the estate to be probated, or will be using a Small Estate Administration, the money in a small savings or checking account sometimes can still be withdrawn from a bank. At some banking institutions, a family member simply needs to present a death certificate after 30 days to recover accounts less than $10,000 or $15,000. We have observed that banks’ policies vary regarding claiming small accounts.
Avoiding a Negative Outcome
Before Death:
- Find out if the person’s bank permits recovery 30 days post-death and the bank’s threshold for account balances.
- Work together with the person to keep the bank account below that limit.
After Death:
- Determine if a Small Estate Administration is needed or if all assets can be claimed by working directly with the bank.
- Work with the beneficiary to submit the necessary documents to the bank.
- Identify assets that require processing by an attorney under a Small Estate Administration.
Learn more in our four-part series: “An Estate Executor’s Financial Challenges – Advice from Personal Finance Managers.”
Part 1: The Basics
Part 2: Checks Received after a Death
Part 3: Debts, Bills, and Banking