Trustee's Duties and Responsibility After Death

06/21/2011

After death, a person who was named as a personal representative or successor trustee often asks what are his or her duties and responsibilities.  Below is a general list of items that a personal representative or successor trustee should do or consider:

  • Locate and review all of the deceased’s important papers.  Sometimes directions for funeral and other pertinent information may be located with other papers, so these documents should be reviewed as quickly as possible.
  • If the deceased was living alone, change locks and take any steps necessary to close the house.  If the house will be vacant, insurance carriers should be notified of this fact.  Check on auto and property insurance to be certain assets are insured against loss or liability.
  • Obtain certified copies of the death certificate from the funeral director.
  • Open a probate estate if needed.
  • Make a list of all household goods.  If several beneficiaries will receive personal property, consider photographing personal property and take an unrelated, disinterested witness along when you make your list.
  • Create a complete list of all assets and establish the value of those assets.  The value at the time of death determines the new tax basis of appreciated assets, since all capital gains on assets is forgiven upon death.  Even if the real estate, stock, or any other appreciated asset is not sold immediately, establishing a fair market value as of date of death is necessary to establish the new tax basis for future appreciation purposes, to determine whether state or federal estate tax is an issue, and to equitably distribute assets to beneficiaries as provided in the trust agreement.
  • If several different accounts exist, it simplifies things greatly if liquid assets are consolidated into one account (or one savings and one checking account). 
  • Pay outstanding bills or debts. 
  • Obtain a tax identification number for the estate and/or trust. 
  • Be certain that all required tax returns are filed.
  • File any claims for life insurance, IRA’s and other assets needing claims forms.
  • Create an accounting which begins with the inventory listing all assets existing on the date of death, show all additions of any type, subtract all expenses paid, and show current assets on hand.
  • Have a professional prepare a receipt and release form for each beneficiary to sign, simply stating that they have received the inheritance and that they release the trustee from further responsibility or liability.