ESTATE ADMINISTRATION TIMETABLE

The following is a general description of the steps, and the timing of the steps, usually needed for the administration of an estate.

I.  GENERAL OBLIGATIONS --The general obligations of the personal representative (an executor or administrator) of an estate are to:

A. Collect the assets of the estate.

B.  Pay debts and taxes owed by the decedent or the estate and invest the assets of the estate prudently.

C. File all income tax, estate tax and other forms required.

D. Distribute the assets of the estate in accordance with the will (or, if there is no will, in accordance with the laws of decent and distribution).

II. INITIAL DUTIES--Shortly after death, it is usually necessary to:

A.  Arrange for the funeral (if there is no surviving husband or wife, children, or other next of kin to do so).

B. If there is an unoccupied residence, make sure that it and any valuables in or around it are secure and that there is homeowner and liability insurance.  If you have to arrange for homeowner’s insurance be aware that the premium will be very high for an unoccupied building.  If it is winter, consider having the house winterized by draining the plumbing and putting antifreeze in the toilet bowls.  Talk to the neighbors and ask them to keep an eye on the house.  Arrange for grass cutting or snow shoveling.  Have the post  office forward the mail to your or your lawyer’s address.  This will be a great resource for determination of assets and debts.

C. If there is a will, file it with the Clerk of Court (Required to be done within 30 days of the death of the testator - See 755 ILCS 5/5-1  http://www.legis.state.il.us/legislation/ilcs/ch755/ch755act5articles/ch755act5Sub6.htm )* and prepare the petition and other court documents to arrange for the probate of the will (or the issuance of letters of administration if there is no will).  Publish for claims in a local newspaper (In Illinois a newspaper of general circulation in the County of the decedent’s residence is sufficient notice to creditors and unknown heirs).  Notify by letter disputed creditors of decedent to file claims.

D.  Prepare and file an inventory of the assets in the estate with the Probate Court, unless this is Independent Administration, in which case begin the preparation of the Inventory so that it can be shared with heirs and filed with the final account.

III. WITHIN THREE MONTHS OF DEATH

A.  Notify employers, banks, insurance companies, stock brokers, and others of the death, and begin to identify assets and liabilities of the decedent and consider the necessity of selling assets to pay bills or to avoid losses to the estate by reason of a falling market, mortgage foreclosure or deterioration.

B.  Invest the estate assets prudently, considering the law regarding appropriate investments by fiduciaries.  Illinois Compiled Statutes Chapter 755 ARTICLE XXI. INVESTMENTS BY REPRESENTATIVE at:  http://www.legis.state.il.us/

C.  Send required written notices to beneficiaries under the will, to heirs and to creditors.

IV. WITHIN SIX MONTHS OF DEATH

A.  Estimate the amount of cash needed to pay debts and taxes, and plan for any sales of assets needed to pay taxes and to distribute the estate.

B.  Assemble cash needed to pay taxes that may be due.

C.   Obtain alternate valuation of assets if needed for Federal Estate Tax purposes.

V. WITHIN NINE MONTHS OF DEATH

A.  Prepare and file Federal Estate Tax Return Form 706 (if needed).  Pay federal estate taxes and make any Illinois tax deposit that may be due.  If the return cannot be completed, then be sure to file requests for extensions of time to file the returns, but pay the amount that is estimated to ultimately be due.

B.  Prepare and file any other death tax returns needed for property located in other states.

VI. OTHER TASKS

A.  Prepare and file the decedent's final lifetime income tax returns, federal (1040) and state (IL1040) (due on April 15 of the year following death).

B.  During the administration of an estate, federal (1041) and state income tax returns (IL1041)   must be filed showing the income and expenses of the estate.

VII. DISTRIBUTION OF ESTATE

The distribution of assets from the estate can begin at any time, but is usually concluded after the estate taxes have been determined and paid and the claims period has run. Depending on the circumstances, distributions can be carried out:

A.  After an accounting has been filed in court and approved by the court. 

B.   Partial distributions can be made before closing of the estate.  In larger estates consider making distributions of at least the income, because the estate pays income taxes at 40%, while most beneficiaries will be in a lower, perhaps 30%, tax bracket.

C.  After a final account and final report (and IRS closing letter obtained in estates paying Federal Estate Taxes) has been approved by all beneficiaries.

D.  After all claims and taxes have been provided for.

E.  By receipt on distribution (voucher) and approval of the final account and attorney and representative fees has been obtained from each beneficiary.

VIII. FINAL FILINGS

Once the administration of an estate has been completed and the assets have been distributed:

A.  Final federal and state income tax returns can be filed.

B.  It is a good practice to obtain from each heir and creditor a receipt or voucher for each payment made.  These receipts or vouchers or cancelled checks should be filed with the final account before the estate can be closed.

C.  The notice, a copy of the inventory and the final account should be given to heirs or a waiver of notice obtained regarding the final accounting and closing of the estate.

D.  File Final Account, vouchers, Final Report and Inventory, if Independent Administration.

*If you think the will is in a safe deposit box, get a death certificate and prepare an affidavit of an interested person and set a date with the safe deposit box company to have the box drilled and open in the presence of a representative of the safe deposit box company.  You may only take out the will, leaving the rest to be removed by the appointed representative.  See: 755 ILCS 15/1.http://www.legis.state.il.us/legislation/ilcs/ch755/ch755act15.htm