Managing Estate Assets

An estate asset is anything that has value. It can be a home, bank account, piece of jewelry, automobile, etc. One of your key duties as an executor is protecting and maintaining the estate’s assets. Ultimately, you may need to sell some or all of these assets and distribute the rest directly to the heirs.

Before you begin selling or distributing assets, it will make your job easier as executor to have a written plan for which assets you need to sell and which you can distribute to the heirs.

Specific Bequests and Named Beneficiaries

The decedent’s will may specify that certain assets be distributed to specific heirs. However, not all such bequests can be honored. Sometimes the asset is no longer part of the estate, sometimes the bequest conflicts with local law (i.e., community property), and sometimes an asset must be sold to pay estate taxes.

Other items won’t pass through the will, but will be left to named beneficiaries. This can include life insurance, property held in joint tenancy or community property with the right of survivorship, funds in an IRA or 401K for which a beneficiary was named, stocks held in a transfer-on-death account, etc.

Asset Sales

As the estate’s executor, there may be reasons you decided to sell an asset: to raise cash to pay off debts, to reinvest an asset elsewhere for better financial performance, or to make it easier to partition the estate. For instance, it’s much easier to divvy up cash among multiple beneficiaries than give one person a car, another a piece of art, and another a diamond ring.

It's also common to hold an estate sale to liquidate items the heirs don’t want. There are three approaches to estate sales:

• Garage sale: this works well if there are only a small number of inexpensive items to sell.
• Professional auction: if the estate is more significant, you can hire a professional auctioneer to hold an auction at your location or their site, depending on the size of the estate and the number of items being auctioned.
• Estate liquidation: the most straightforward approach to selling assets is hiring an estate liquidator, which will also have a cost attached.

Check online to find an estate liquidator or professional auctioneer. Before selecting someone, talk with multiple services, check their references and meet with them personally to ensure everyone has a common understanding of what is being sold. And, of course, read all contracts carefully.

You can also sell individual assets directly through other channels. For example, take jewelry to a jewelry store or sell a car to a used car dealership, or online through a vehicle sales website.

If the estate is going through probate, you may need to secure the court’s permission before selling certain types of assets, or in some cases, any assets at all.

Asset Disposal and Charitable Donations

Some assets have no value, such as frayed clothing, old newspapers, or piles of junk. If you can’t sell an item and none of the heirs want it, you may have to pay someone to dispose of it, or do it yourself.

Exercise caution when giving assets away to charities. Unless the will gives you the authority to do so, you don’t have the legal right to give away items of value, and charities generally won’t accept worthless items.

If the will does authorize you to make charitable donations, make sure no heirs are interested in an asset that has value, and get their permission to sell it in writing.

If an asset isn’t sold, disposed of, or donated, it will ultimately need to be distributed to an heir or multiple heirs.

Dealing with Firearms

Dealing with firearms can be somewhat complex, depending on federal, state, and local regulations. Generally, an executor can distribute a typical gun to any close relative of the decedent, as long as the recipient isn’t legally prohibited from possessing it.

• NFA Firearms: Certain weapons are regulated by the National Firearms Act (NFA), including fully automatic weapons, short-barreled rifles and shotguns, and silencers. These weapons and accessories must be registered with the Bureau of Alcohol, Tobacco, Firearms, and Explosives (ATF), and any distributions or sales must be made according to ATF rules.
  
  
• Gun Registration: A few jurisdictions require registration for more common types of weapons, although an executor usually has a short period to possess and then distribute a firearm without registering the gun themselves. You should check local rules.
  
  
• Prohibited Persons: Generally speaking, you cannot give a weapon to a person who is legally prohibited from possessing it, such as someone sentenced to more than a year in jail, dishonorably discharged from the armed forces, or judged mentally incompetent. However, some states allow prohibited heirs to take possession of a gun for up to 180 days to sell or otherwise dispose of it lawfully.
  
  
• Heir Responsibilities: Note that some states require the recipient of a firearm to obtain and possess a firearm license, register the firearm, and/or take a gun safety course.
  
  
• Interstate Transfer: An heir can legally transport firearms across state lines subject to certain restrictions, such as keeping the weapon unloaded and in a locked container, out of easy reach of anyone in the vehicle, and being legally able to possess the weapon in the starting and final jurisdictions.
  
  
• Sales: If selling a gun, some states require that private individuals perform a background check on a prospective buyer (usually through an FFL dealer).
  
  
• FFL Dealers: Perhaps the safest way to legally transfer or sell a firearm is via a gun dealer with a Federal Firearms License (FFL), who can help you fill out any required forms, hold the gun for you, perform any background checks, and then release the weapon into the possession of the recipient when everything is complete. Check online to find FFL dealers in your area.

Questions Concerning Probate and Real Estate?

Certain aspects of settling an estate, like handling an estate’s real estate holdings, may be outside your area of expertise or comfort zone. If in doubt, work with a professional.

If you have questions concerning probate and real estate in Tarrant, Parker, Wise, Collin, Denton, or Dallas County, contact David Pannell and Cities Real Estate. David has extensive experience helping families with their real estate needs before, during, and after the probate process.

David has been an agent/realtor since 2005. He has served as a United States Marines, City of Arlington police officer, and is a dedicated family man. You can trust him to put your interests first in any and all situations.

Call David today at (817) 797-9047 for help with your real estate and probate needs. You will be treated respectfully, and your requirements will be met efficiently and confidentially.