Serving as the executor of someone’s estate is a difficult job. Many people find that they have to take a leave from work in order to handle everything involved. Depending on the size of the estate and the level of preparation undergone by the testator, you could have several weeks or even months of bookkeeping, asset location and distribution ahead of you.
With so much to do, you might be looking for ways to decrease the amount of time that tasks require. Choosing not to write everything down could seem like a reasonable way to speed up things.
However, failing to create clear records could cause serious legal issues for you down the road. No matter how frustrating or repetitive it may seem, you must document every single thing that you do with assets from the estate.
A clear accounting of who got what protects you as executor
The heirs and beneficiaries of an estate are often disappointed with what they receive. Even when someone has been very generous, people can still take offense with their inheritances.
Occasionally, frustration with the outcome of the estate plan can lead people to challenge the estate or even the administrator. They might allege theft or misappropriation of estate assets. If you don’t have proof of who got what and when, the courts could side with the person challenging you.
There could potentially be financial and legal complications, depending on the value of the assets involved. The best way to protect yourself from allegations of misconduct is to track everything that you do for the estate in writing.
Even family members should sign receipts for assets they receive
You probably already know that you need receipts to prove that you paid off and closed the necessary accounts, handled taxes and liquidated certain assets. What you may not consider is the fact that physical assets often have significant value as well.
A necklace, for example, could have both emotional and financial value to the members of the family. Once you have the assets set aside for a particular heir or beneficiary, that person should sign a receipt that verifies they received the items. Creating receipts for physical assets helps ensure that there is no confusion about who received which items. It can also help you if someone claims they didn’t receive an asset that they did, in fact, obtain from the estate.
In addition to receipts for physical items, maintain documentation for all major transfers from estate accounts into beneficiary accounts. Those records can help you in the future if your role as executor or capability in that position winds up challenged in court.