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Thursday, August 19, 2010

10 ways an executor can maximize an estate

As an executor, you may have been told that it's your responsibility to maximize the estate you are administering. Obviously part of this means that you should guard against financial losses to the estate. It also means that you should make choices and take steps to ensure that you are running the estate in a way that leaves the greatest amount possible to the beneficiaries.

How can you do this? Here are 10 ideas:

1. Protect the physical assets. Make sure insurance is in place. Put valuables in a safe place. Change or add locks. Move the deceased's vehicle to a garage. Cancel credit cards.

2. Apply for all benefits that are available to the estate, such as the Canada Pension Plan death benefit, and death benefits available through private pensions, private companies or employers. If any life insurance policies name the estate as beneficiary, notify the insurance company and collect the proceeds.

3. Collect debts owing to the deceased, such as unpaid wages or bonuses, unpaid government benefits, loans to friends and family, business receivables, refunds, unpaid rents, and insurance settlements. Understand that sometimes it costs more than the value of a debt to collect it and use your judgment.

4. Keep the estate's money invested, even if you think you'll only be holding on to it for a few months.

5. When investments put in place by the deceased must be given to a beneficiary and are earning a rate that you won't be able to duplicate, consider transferring the investments directly without cashing them first.

6. Use tax elections wisely, and take advantage of any available rollovers or other tax breaks.

7. Control your costs, such as sending an overnight courier rather than driving documents to a distant destination yourself. If the deceased lived in a rental unit, give notice to the landlord immediately.

8. Pay the estate's debts promptly to avoid interest and penalties.

9. Don't let the pressure from the beneficiaries hurry you. We all know that rushing things causes errors. While you don't want to make people wait unnecessarily, you also don't want to be rushed into taking steps when you haven't got all of the information you need.

10. If a dispute arises with a beneficiary or creditor, consider mediation or other means of settlement rather than going with expensive litigation.

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