Sell/Discard/Transfer Asset

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Within the estate settlement process, you will eventually have to settle each asset in some way: distribution, sale, transfer (to another asset), or disposal.

Transfer

To record the transfer of value from one estate asset to another (perhaps you are consolidating accounts, or funding the estate account), simply select the desired source asset in the Assets Tab be clicking its checkbox in the leftmost column, and then using the Edit | Transfer menu.

To see a list of all transfers with which a given asset has been involved, you can make the Transfers column visible on the Assets Tab via the View | Table Columns menu, then click the Transfers cell of the desired asset.

As with many EstateExec actions, you could record a transfer another way, creating a Transfer transaction on the Cashflow Tab, but the result will be the same, and the transfer will appear in both places regardless of how you choose to initially enter it. On the Cashflow Tab, you can see all transfers with which a given asset has been involved by using the filter bar at the top of the table to show only transactions with the category "Transfer".

Note that sometimes the estate will engage in transactions a financial institution will label a "transfer" (for example, when paying a bill online), but the exact payment label used by the financial institution is irrelevant – within estate accounting, the term "transfer" is reserved for movement of funds between estate assets.

Sale

Sometimes you will sell an estate asset so you can pay estate debts, or simply to convert an unwanted item into more easily distributed cash. To record that you have sold an asset:

  1. Select the Assets tab, and click the "Sold" cell for the given asset.
  2. Enter the date of the sale (note that you cannot enter a date of sale earlier than the date the asset entered the estate).
  3. Enter the amount received.
  4. Press "OK".

EstateExec will automatically create a cash transaction in the Cashflow tab that reflects the addition of the proceeds into the overall estate account. For that matter, you could just record the sales in the Cashflow tab, and it would automatically be reflected in the Assets tab.

Sale with Transaction Fees

If the sales involves significant transactions fees (for example, when selling a house), you may want to explicitly record that fact:

  1. On the Cashflow Tab, select the asset you are selling using the asset selector at the top left of the table.
  2. Click the Create Transaction button, and enter a Withdrawal Transaction of category Estate Expense. If there are multiple elements to the fees (such as Title insurance, realtor fee, etc.), most people would just record it all in one "closing costs" transaction, but in certain situations people choose to create a separate transaction for each major fee component.
  3. Record the sale on the Assets Tab as described above (or on the Cashflow Tab, use the asset selector to switch to account that received the funds, and create a sale transaction... either way, the sale will appear within EstateExec everywhere it's supposed to).

Sale of Asset with Mortgage (or any Secured Debt)

If an Asset has been used to secure a Debt (such as a mortgage), we recommend:

  1. Record the sale as described above, entering the Amount as the net amount you received... but at this step keep in the Amount anything used to pay off the debt.
  2. On the Debts Tab, click the Paid column of the Debt associated with the Asset (e.g., the mortgage), and enter the information. Note: You could instead record the Debt payment as you would handle other sale deductions (see Sale with Transaction Fees above), but be aware that while everything would still total correctly, someone looking at the Accounting Report might wonder why the Asset appeared to drop so much in value (so just explain it if anyone asks).

Financed Sale

If you are selling an asset to someone who will pay the estate over time, in essence you are selling the asset and lending the buyer some or all of the amount necessary to complete the sale:

  1. Record the sale as described above, entering the Amount as the net amount you expect to eventually receive.
  2. On the Assets Tab, create a new asset of type Loan.
  3. Record a transfer from the asset where you deposited the sale proceeds to the new Loan asset, for the amount the buyer has yet to pay.
  4. When the buyer makes a payment, on the Cashflow Tab record a deposit of category "Loan Asset Repayment", which will automatically reduce the value of the Loan asset by the amount paid.

Partial Asset Sale

You cannot directly record the partial sale of an asset. EstateExec considers a sale final, and no further transactions involving a sold asset are permitted.

If an entire asset was sold, but in different pieces to potentially different buyers, you may want to enter a single sale for the combined amount, and explain the details in the Notes column.

Otherwise, the way to handle a partial asset sale is to redefine the overall asset into smaller component assets, so that each component asset can have its own fate.

  • For example, if the decedent owned a fleet of 5 cars, you might have defined an asset "Car Fleet (5 cars)" worth $120K. If you intend to sell only the $30K Cadillac, create a separate asset for the Cadillac, and redefine the original asset to be "Car Fleet (4 cars)" worth $90K.
  • In another example, if the decedent owned some land and you sold 40% of it, redefine the asset into 2 separate chunks of land, and sell the 40% chunk.

The principle here is that if a part of an asset is valuable enough to have its own separate fate, it is important enough to be listed as its own separate asset.

Asset Disposal

Sometimes an asset turns out to be basically worthless, no heir wants it, and you need to dispose of it. In such cases you can either simply delete the asset (it's not really an asset if it's worthless), or to follow best practices and have a record of what you did, you can:

  1. Select the Assets tab.
  2. Select the row of the desired asset by clicking its row checkmark in the far left.
  3. Using the buttons along the top of the table, select "Settle..." and choose "Discard".
  4. In the Name field, enter the name of any disposal service you used.
  5. In the Amount field, enter any fees you had to pay the disposal service.
  6. Enter the date of the disposal.
  7. Press OK.

If the asset was a loan from the estate, and you are basically writing it off, you may want to file a Form 1099-C with the IRS. Be careful about writing off loans to heirs: see Heir Debts for preferred approaches.

Distribution

See Manage Distributions for instructions on recording asset distributions.

Tip: You can directly access a desired settlement dialog by clicking the asset's corresponding cell (e.g., Distributed) on the Assets Tab.

See also Managing Assets.

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