Latest News / Being an Executor is Not Fun
Being an executor is not fun
October 29, 2018
Few people appreciate how complicated the job of an estate executor can be.
A bit over a year after Prince died, a Minnesota probate court made its finding of who the heirs to the musician’s estate would be. The court intervention was required because Prince died without a will, and therefore his estate will pass under the laws of intestacy—the state-made will. During the year following the singer’s death, many potential heirs came forward. Most were ruled out based upon DNA testing. Six heirs were announced by the court in May, Prince’s sister and five half-siblings.
Determining the heirs is only the beginning of the complications for this particular estate. A dispute has arisen over the ownership of Prince’s recorded and published music, as well as a trove of unpublished recordings. A sound engineer who worked for Prince for two years attempted to publish five of his unreleased songs, so the estate sought and received a temporary injunction to stop that. The estate has been estimated to be worth from $100 million to $300 million, which implies that a federal estate tax of $40 million to $135 million soon will be due. That obligation will have to be paid in cash, as the IRS does not accept song royalties as payment. Some estate assets may have to be liquidated.
Lawyers’ fees to date reportedly have run to $4 million. The estate is resisting the payment of some legal fees, including those of disappointed claimants to heirship. The case has been characterized as the most complex probate case in Minnesota history.
Elements of estate settlement
Celebrity estates present unique settlement issues. But winding up the financial affairs of any affluent individual may prove surprisingly complicated. The steps include:
• Inventory the assets;
• Obtain insurance as necessary;
• Manage investments;
• Collect debts owed to the decedent;
• Pay debts owed by the decedent;
• Raise cash;
• File death tax returns (federal estate tax and state estate or inheritance tax) if needed;
• File decedent’s final income tax return;
• Distribute assets or fund trusts in accordance with the will; and
• Provide an accounting for the management of the estate.
Someone coming into this task for the first time is likely to find it daunting. There are companies, such as us, that include estate settlement as a core business function. We have the recordkeeping systems in place, and we have the experience and expertise required to make estate settlement as painless as possible.
Questions to ask your executor
Here are a few key characteristics to look for as you evaluate the candidates for settling your estate:
• Experience. Have the individuals or organizations settled estates before? Is it part of their daily business routine? Have they been exposed to a wide range of estate settlement issues over the years?
• Skills. Is the executor candidate familiar with modern portfolio theory? How about the prudent man rule? Will investment management issues be a problem, or can they be handled routinely?
• Availability. Will the proposed executor be ready to take on the job at any time? Is there a chance that illnesses, vacations, or career issues will interfere with the job of estate settlement?
• Impartiality. Does the prospective executor have a financial interest in the estate? Will all parties consider the executor fair and impartial? Can the executor play a constructive role in settling any disputes that arise among beneficiaries?
Choosing an executor is similar to hiring an employee, but the stakes are much higher.
We are ready to serve you
Who should you choose to settle your estate? We have the skills, the experience and the knowledge to handle properly the job of estate settlement. We are available, and we are impartial. We understand the nature of fiduciary responsibilities, and we know how to discharge them.
And for all this, our fee for settling an estate is generally comparable to what an inexperienced individual would receive. In some cases our experience will help to reduce estate shrinkage, increasing the amount available for beneficiaries.
Would you like to learn more? Please call on us for more details about our estate settlement service.
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