What does an executor do with an old house full of papers?

This is another reader question that I think will interest many of you. I have been asked this question at seminars as well, so I know some of you wonder about the logistics of an executor's job. Here's the question:

My elderly father lives alone in his house [in another city]. The house is dated (1960s) and is cluttered with furniture from my Grandmother plus paper and files from dabbling in the stock market. He has engaged a financial institution to act as Executor of his estate. How does an institutional Executor typically handle a cluttered house where the paper may be valuable? If it falls to me, will I be compensated? At what rate?

And my answer:

I've heard that corporate executors (i.e. trust companies) don't actually go to a deceased person's home to deal with their effects, and am happy to tell you that information is completely wrong. When a trust company is acting for a person who passes away, a specific trust officer is assigned to that family. The trust officer himself or herself will go out to the house as many times as needed to determine what is in the house and what needs to be kept or discarded.

Trust officers don't take paperwork lightly. They will examine it to make sure that they have accounted for all assets such as bank accounts, investments, titles etc. They will also look for papers that mention liabilities such as mortgages, loans, bills, lines of credit etc. The executor must prepare a full, accurate inventory of the deceased's assets and liabilities, and that can only be done if paperwork is looked at carefully.

Other items may turn up during this process, such as another will, stock certificates, or Canada Savings Bonds. The trust officer will also try to locate credit cards, identification cards, previous tax returns and birth certificates.

Any valuable assets such as cash in the house or jewelry will be documented and taken by the trust officer to put into the trust company's vault. Also taken are documents with sensitive information such as the deceased's social insurance number and bank account numbers. The trust officers keep a full, complete log of everything they remove from the house, garage, shed and vehicle.

At this time, the trust officer also takes a good look around to see what else needs attention. For example, is there a pet in the home? If it is winter time, is the heat on and the heating bill paid? Is the house insured? Are there any broken windows that need repair? You simply never know what you might find.

Before dealing with the "clutter", the trust officer will read the will and discuss with the Manager of Trust what steps should be taken. The will may contain instructions to give certain items to certain people. Gifts like that are not necessarily gifts of monetary value, so the trust officer has to be careful not to assume that anything in the house is worthless.

Once the trust officer has a clear idea of what is in the house and has removed essential paperwork, valuables and specifically gifted items, he or she will make arrangements for the house to be disposed of. Depending on what's in the will, the house must either be transferred to a beneficiary or sold. Most of the time the house is to be sold.

Before that can happen, the house has to be cleared out and cleaned. If a house is full of antiques or good items of furniture, there may be an estate sale or garage sale, with the money going into the estate. In most homes though, there is not a sale of this kind because the items have little monetary value. Items that are in good shape might be given to a charity.

Normally a cleaning company is hired for the actual cleaning work. Sometimes a family member wants to do that rather than have a company come in, and that can often work out just fine. If you took on that role, you would be compensated for your work at the rate that you and the trust officer agreed on before you started the work. It's a bigger job than most people realize.

You mention that the house is very dated, which is certainly common among homes where seniors have lived for many years. You don't mention whether it's in good repair. If the house can't be sold in its current condition, there may have to be repairs or even renovations done before it goes on the market. Sometimes updating the kitchen and replacing worn carpeting, plumbing or windows can increase the price of a home by many thousands of dollars. Those decisions will be made by the trust officer as he or she tries to realize the best possible price for the house.

The trust officers work closely with family members who are named as beneficiaries of the will. Beneficiaries are kept up to date on what steps have been taken. Where family members should be involved in a decision, they are brought in. For example, many wills say that personal items are to be divided among the children "as they agree". The trust officer will arrange a day for the children to come to the house and choose the items they want.

The trust company does everything that an individual executor would do, except that the trust officers have experience at it and rarely make mistakes.  I notice that your Dad is in the same city as I am. If you are visiting him one day, feel free to come by our office to meet our trust officers for a chat. I believe you'll feel reassured that a trust company really is made up of caring individuals who are ready and able to look after your Dad's needs.

Down-sizing boomers looking to sell their stuff

The aging boomer demographic is affecting us in ways we may not yet even realize. Downsizing at the empty nest stage is one of them that I hadn't even really considered yet. This article from Smartmoney.com illustrates the issue and its challenges. Click here to read it.

Handling your parents' estate? Do your homework.

This article in the Globe and Mail talks about estate sales and "re-purposing" items in your parents' home once the home is no longer needed. This could take place either at the time the parent passes away or when he or she is moving into long term care or a smaller place. There are ideas here you may not have thought about. And anyone that can help an estate run smoothly and avoid disputes between the kids is ok in my book. Click here to read the article.

For a Great Deal, Try an Estate Sale

If you've ever wanted to know more about estate sales, or are considering holding one, now is your chance to learn more. The link below goes to a blog post by Toronto lawyer Megan Connolly, and in it she references several websites and facts that you might find interesting. I've been to several estate sales around rural Alberta where farm equipment, tools, machinery and household items were sold. They are extremely well-attended sales, and they can work just as well in an urban setting.

For a Great Deal, Try an Estate Sale

When moving seems impossible

Have you or your parent considered hiring a professional "senior mover" to help with the sale of your parent's home and the move to a new place? This story from the New York Times describes one family's experience with doing so, and gives several interesting facts. Click here to read it. This is an American story and I've encountered several senior movers in the USA, but are there many in Canada? If so, I'd like to know about them, so hopefully they'll leave a comment here or send me an email.

How can I get rid of Grandma and Grandpa's stuff?

This link doesn't really go to an article or story. It's a question that someone posted online, and several people answered it. I found it interesting because it's the kind of question I hear a lot. It's really not unusual that a person is doing his or her best to be an executor but doesn't really know how to deal with specific situations. Click here to read it.

In this situation, the person is wondering how he can rid his home of tons of personal and household things that used to belong to his grandparents. He doesn't say that he's the executor, but I assume that he must be as he is in possession of all of the goods and seems to be reporting to the rest of the family about them. His real issue is that the other people in the family don't want the items but also don't want him to dispose of them.

If he is the executor, he should dispose of the items in the way that maximizes their value. Now, used furniture and household items don't have a lot of resale value. An estate sale or garage sale might gain a few dollars, which would go into the estate and be divided among the beneficiaries. Many of the items he mentions will end up being thrown away, as nobody is going to want second-hand bedding. The executor might donate items that are in good condition but that weren't sold at the estate sale to a charity, and may or not be able to get a small charitable receipt for them.

Documents such as tax returns were mentioned as well. He says that seven years have passed since his grandfather passed away, so on the face of it, it may seem that documents may be discarded. I'd want to make sure that any estate tax returns were completed and filed before I counselled anyone to shred the old documents.

This fellow has been brought to a halt by the self-interested objections of family members. I think he should give them one last chance to collect what they want, then get on with selling them.

Dealing with Elder Hoarding

This is an interesting, compassionate article about dealing with the hoarding tendencies of some elderly people when hoarding starts to become a safety issue. Definitely worth checking out. Click here to read the article.

Should you downsize for retirement?

Have you thought about whether or not you want to keep that big family house after you retire? Here is an article that will help you decide, from Philip Statler of Statler Financial Services Inc.

Dealing with household goods when your aging parent is moving to long term care

I've recently found this book, "De-Stuff" by Jan Robbins Durr, which might be extremely helpful for anyone who is trying to figure out what to do with 40 or 50 years worth of possessions in the family home before it can be sold. It could be very applicable to the family of a senior who is moving into long-term care or in with one of his or her children. Find out more about the book by clicking here.