Although nobody likes to think about it, as the old sayings go, we “all have to go sometime” and we “can’t take it with us when we go.” For those reasons, an important part of a comprehensive estate plan is the naming of your estate’s executor, someone who will administer the estate and be responsible for it until all the legal issues are settled. In order to lessen the chances that a will could be contested or that the estate administration will drag out for years, the executor must be a person or entity that is responsible, organized, detail-oriented, trustworthy, capable and knowledgeable.
Why Is it so Important to Pick the Right Executor?
Your estate’s executor – some jurisdictions call this person an “administrator” or a “personal representative” – is the one who will make sure that your will is declared legally valid (done in the probate court), pays creditors, pays estate taxes and allocates assets to named beneficiaries. The executor also has to oversee any will contests or audits that the estate undergoes. Even a relatively small error in any of these capacities could result in the loss of a portion of the money and property you wanted to pass along to your heirs.
Furthermore, estate tax rules signed into law by President Obama in December 2011 give a huge estate tax exclusion – known in legal circles as “portability” – to a surviving spouse, but the decedent’s estate must be handled properly to qualify. An unskilled executor might not be aware of this huge estate tax loophole, or might not take the proper steps to ensure that the $5 million exclusion is secured.
What Issues Should Be Considered When Deciding Upon an Executor?
Traditionally executors are often family members. Picking a family member may be convenient, but it might not be the best choice to offer the greatest benefit to your particular estate. A family member might not be up to the task of filing legal documents, representing the estate in court (if necessary) and tracking down named beneficiaries in order to disperse property, so it is always wise to consider people outside the family – like trusted friends, financial advisers or attorneys – who may be better suited for the job.
Some people may choose multiple executors in the hopes that they can share the workload and get through the process easier. Legal experts generally advise against that, though. Instead of an even split of labor that goes smoothly, often dual executors disagree about how to implement the decedent’s wishes or they may disagree on the time commitment required. One way to prevent hurting the feelings of multiple children or other close family members when naming an executor is to pick a primary executor and then make the remaining possibilities alternates.
Another important factor to consider when naming an executor is the matter of legal fees. Under state laws, executors are compensated for the time and energy they devote to the administration of the decedent’s estate with a small percentage of the proceeds of the estate. Oftentimes family members who are appointed as executors might waive that fee, leaving more for the beneficiaries; someone outside the family acting in a professional capacity will likely not be so generous with his or her time.
With time, consideration and the advice of a skilled estate planning attorney in your area, it is possible to name an honest and dependable executor who will handle your estate with care and ensure that your final wishes are honored.