Author’s Note: This is the first in a series of personal finance columns on the subject of being the executor of an estate. These columns are based on my own personal experiences in this regard. Individuals should consult a professional advisor and take their own circumstances into account. While my primary objective is to show my readers how to maximize the value of the estate, I will also try to prepare my readers for the unimaginable difficulties faced by the executor.
Pay attention people because I am about to save you a ton of money. I say that with absolute confidence because most people only play the role of executor once in a lifetime — usually when their second parent passes. Because you can’t approach this task with first hand experience, you must therefore learn and benefit from the experience of others.
Sooner or later, many of my readers will be called upon to perform the burdensome, unhappy task of being the executor of an estate. Unhappy because of the sad circumstances that give rise to the task — the passing of a loved one, and burdensome because it is a most difficult, time consuming task — even for a relatively modest estate worth only a few hundred thousand dollars. Such an unhappy, burdensome task recently befell me.
The task of executor is physically, mentally, and emotionally difficult. It is physically difficult because of the hard labor associated with disposing of personal belongings. It is mentally difficult because there is a tremendous amount of paperwork associated with the task. If you’ve ever managed a complex project with hundreds of tasks, task predecessor / successor relationships, and multiple third parties (“subcontractors”), you can well imagine how difficult and complex a job this is.
Here’s another way to put the difficulty of the task into perspective. If you currently are responsible for all of your personal finances — paying bills, managing investments, doing taxes — you know how difficult a job it is to do. Now imagine doing the same thing for someone else, and imagine how much more difficult it is because you aren’t at all familiar with that person’s finances or filing system. Take the current number of hours you spend each week on your own finances and multiply it by three to get an idea of how much time you will be spending for several months on the deceased’s finances. It’s like trying to do a jigsaw puzzle with your eyes closed.
Finally, the task of executor is emotionally difficult because you are trying to do all of this at the worst possible time — while you are grieving for your loved one. It would be nice if you could put everything on hold for a few months or even a few weeks until you are emotionally up to the task, but it just doesn’t work that way folks. Even in death, time is money, and actions must be taken promptly and intelligently to preserve the estate. In fact, this may even be truer in death than in life, because in death revenues cease but expenses continue. So the name of the game is to get rid of the expenses as soon as possible.
The task of executor is also emotionally difficult because the process is dehumanizing in the sense that it very quickly eliminates most of the physical evidence that your loved one existed. You are going through a person’s prized belongings, and making decisions about what to keep and what to give or throw away. You are doing it very quickly, and somehow it seems unjust to reduce a person’s life to a series of snap decisions about what will constitute that person’s legacy.
And finally, it’s emotionally difficult because the tasks the executor performs brings a constant reminder of the frailty that is life. When going through your loved one’s financial records, you become acutely aware that one day a person is having his oil changed, getting a prescription, or paying a bill — and the next day he is gone. Unless you have already performed this task, you cannot possibly have any idea of how disturbing it is to see your loved one’s name on a check dated two days before he or she died.
So against all of this backdrop you are forced into this role, and you have no choice but to do it well and do it quickly — especially if there are other heirs depending upon you to do a good job. Future columns in this series will explain how to do just that, and how to save a lot of money in the process.
Coming in Part 2: Getting professional help.
