Among the many tasks that fall to survivors and executors of nearly any estate, but certainly one in which there are substantial assets, is to gather the records of assets and accounts, values and costs. This may never have been more challenging than it is now, as so many securities are electronically held for investors, and often statements and records are digital, too.
In addition, accounts or records of assets may be spread all over the place–across banks, brokers, insurance companies, investment advisors and other firms. If there was any reason why a spouse or children were kept in the dark about certain assets–some of those may never be located.
But it’s not just piecing together information from the accounts in which, chances are, good records are being kept. What about the home bought 40 years ago; the art, collectibles; jewels or antique cars? If any of these are long-time possessions, it may be difficult to find the records necessary to establish a cost basis.
Since Congress failed to pass any legislation on estate taxes at the end of 2009, the 2010 estate-tax situation is uncertain. There is no estate tax for 2010, so far, but some experts believe that the tax could be revived in 2010, and could even be “retroactive,” according to Carol Kroch, managing director, Charitable Trusts and head of Wealth and Financial Planning at Wilmington Trust. Speaking at a lunch on Feb 2, Kroch advised that for estate purposes, the “basis of inherited assets,” changed from “fair market value” (FMV), in 2009, to “carryover” in 2010, and then will change back to FMV in 2011–when the estate tax comes roaring back at 55% in the highest bracket.
“Carryover from decedent’s basis,” warns Kroch, means clients who are inheriting assets will “need to know what mom and dad paid for the house before they sell it.”
One way that may be accomplished is with an online “vault” of information such as the one provided by Louisville, Colorado-based Executor’s Resource, Inc., founded by Myra Salzer, a fee-only planner who also is founder of The Wealth Conservancy in Boulder, Colorado.
Marketed through intermediaries who often provide it to clients free of charge, or directly to clients through the Executor’s Resource Web site, the firm’s Estate Logic product enables clients to put into a secure online account the, “intentions, stories, ethics and values” of the account holder, Carl Rapp, CEO of Executor’s Resource, told Wealth Manager in an interview in mid-December. The online vault also holds records, account numbers–cost basis–and other information that would make settling an estate easier for wealth managers’ clients and their heirs. The company plans to roll out a product for executors next, Executor Logic, to help guide the “executor through the steps and forms,” needed to settle the estate and to help them fulfill their fiduciary duty, according to Rapp.
Comments? Please send them to email@example.com. Kate McBride is editor in chief of Wealth Manager and a member of The Committee for the Fiduciary Standard.