Whether your estate is large or small, simple or complex, you want to choose wisely who will handle the affairs of your estate when the time comes to pass it on.
Many people think of it as an honor to be chosen, and some think of it as an opportunity to have power. For example, a husband might resent having his wife choose someone other than him if he is used to handling the family finances. Or the wife might resent having a business partner or relative “in charge” if she thinks it ought to be her right. Siblings might feel slighted if another is chosen.
Those who have served as executors realize it may be an honor to be trusted by the one who chose them. It can also take a lot of time and effort. If the affairs of the estate were well organized and easily accessible, the job can be easier. If the estate was large or relationships between the heirs were not in harmony, the job can be much harder.
The best way to begin the task of choosing who will act on your behalf as executor is to think about what tasks they will need to do. Here is a list of those usually expected of the executor:
- Determine what assets are in the estate. This will include bank accounts, physical property such as home, cars and vacation or investment property, insurance policies, retirement funds or business holdings.
- Determine who the heirs are and get detailed contact information for each of them. If the executor is not an attorney, they will probably need to contact legal help to begin the probate process. If you have an attorney who is your estate planner, be sure to leave that person’s contact information for your executor. This will make the process much smoother.
- Pay any bills owed including any funeral expenses.
- File necessary tax reports and pay taxes.
- Distribute the estate to beneficiaries according to the will.
Looking at that list, you can already narrow your choices down by considering who would have the necessary time and ability to take on the task. It doesn’t have to be someone who already knows how to do all of those jobs, but someone who can figure out which things to tackle on their own and which ones will require help. It should be someone you know to be honest, ethical, and who is generally a rule follower and pays attention to detail.
If a family member has the necessary character, skills, and temperament, that may be a good choice and will cost less than a professional. If however, there are problems between the heirs, having someone outside the family may be advised. That is also true if there are troublesome or complex business matters involved. It is not necessary for the executor to have business expertise or legal training, but sometimes it is just the smart thing to do if you know those will be needed to deal with the estate.
With the help of your estate planner, evaluate what will be best for your estate’s management. Once you decide, be sure to choose an alternate as well as your initial choice. Be sure to communicate with the person, agency, or institution you choose. Some institutions like banks will only handle estates worth a certain amount of money. Make sure yours qualified and they are available. If you are naming an individual, talk with them to see if they are willing and available. Be sure to explain fully what would be expected of them. A person can refuse to serve at the time, but you would much rather know now if they are willing.
You should also let your heirs know what you have set up. This will be less likely to cause upset at a time when people are grieving.
Don’t forget to look at your estate plan, including your choice of executor, at least every three years or when something important changes.