As the executor of an estate of a deceased person, one of your duties is disbursal of estate assets to the named beneficiaries. Estates can hold any type of asset, from cash to gold nuggets, from Civil War collections to commercial real estate. Usually there is more than one beneficiary of an estate, and not every beneficiary may be entitled under the decedent's last will and testament to receive the same portion of the estate. Knowing how to make a weighted list for estate disbursal is an important duty of the estate executor.
Prepare the Spreadsheet
Review the last will and testament of the decedent (the deceased person). Find the section in the will that states the percentage of estate assets that each beneficiary is entitled to receive. If any of the beneficiaries is deceased, determine how his share is to be disbursed according to the language in the will. Look for terminology such as per stirpes, per capita with representation or per capital at each generation. Consult an estate planning attorney if you are not familiar with the meaning of each of these terms.
Enter the name of each beneficiary in the first column of your spreadsheet. In the second column, enter the percentage of the estate to which that beneficiary is entitled. Add the percentages in the second column to ensure that your total adds up to 100 percent.
Enter the dollar amount that the percentage represents in the third column. For example, if the estate is $1 million, and Beneficiary A, B and E are to receive 25 percent each, and Beneficiary C and D are to receive 12.5 percent each, your spreadsheet's third column would reflect $250,000 for A, B and E, and $125,000 for C and D. Add the dollar amounts in the third column to ensure that your total equals the total dollar amount of the estate. Label column four of your spreadsheet "In Kind" and column five "Liquid Assets."
Make the List
Identify all illiquid assets, such as real estate, collections or family businesses. Communicate with the beneficiaries to determine whether they would like to receive their portion of these assets in cash or in kind (the actual items).
Divide the assets among the beneficiaries according to their response regarding the illiquid assets. For example, the $1 million estate consists of a home valued at $300,000, a coin collection valued at $50,000, and liquid or investible assets (such as stocks, bonds and checking accounts) valued at $650,000. Beneficiaries A and C would like the house in kind, split 50-50. Beneficiary D would like the coin collection. All others want liquid assets, and all beneficiaries agree to the division.
Enter $150,000 in column four (In Kind) for Beneficiaries A and C, representing 50 percent of the value of the house. Enter $50,000 in column four for Beneficiary D, representing the value of the coin collection. Enter zeros in column four for Beneficiaries B and E. Subtract column four from column three and put the answer in column five. Verify that the sum of columns four and five totals the sum of column three, the estate value.
Disburse the estate to the beneficiaries according to the weightings listed in columns four and five. Review column five (Liquid Assets) to determine whether any of the beneficiaries owe the estate money for taking more than their share of the estate in kind. In this example, Beneficiary C receives 50 percent of the house -- a value of $150,000. He is only entitled to 12.5 percent, or $125,000, from the estate, so he must reimburse the estate $25,000 (the amount in column five), which is pooled with the other liquid assets in the estate and distributed to the other beneficiaries.
Specific bequests, one-time gifts, under the last will and testament should be disbursed to the recipients prior to making a weighted list.
When calculating the amount to be disbursed from the estate, hold back enough to cover any final taxes, fees or unsecured debt. Consult an estate planning attorney or tax accountant if you have questions regarding proper estate distribution procedures.
- Specific bequests, one-time gifts, under the last will and testament should be disbursed to the recipients prior to making a weighted list.
- When calculating the amount to be disbursed from the estate, hold back enough to cover any final taxes, fees or unsecured debt.
- Consult an estate planning attorney or tax accountant if you have questions regarding proper estate distribution procedures.
Mary K. Hogan currently holds a Certified Business Analysis Professional certification from the International Institute of Business Analysis and has held the designation of certified trust and financial analyst. Hogan has been a contributing writer online since 2009 and is currently working on her third children's book.