Most of us recognize the importance of creating a thorough, well-reasoned estate plan. But, we may not give adequate thought to choosing the right executor to carry out the provisions of our wills. It’s a responsibility that should be taken seriously, and that’s why it’s so important to find the right person when putting your estate plan together.
It’s easy to default to a relative without objectively weighing their qualifications or the challenges they may face. Because of the importance and potential complexity of the executor’s role, it’s wise to answer multiple questions before making your choice, here are a few questions to consider:
Will they be around? You probably shouldn’t select someone who is older than you or in questionable health. To be safe, consider naming an alternate if your primary executor is unable to fulfill the role. This is usually a better option than co-executors. Although it may seem sharing responsibilities could lighten the load, it often complicates decisions, paperwork, and banking activities.
Are they local? Some states don’t allow out-of-state executors unless they are a relative or a primary beneficiary. Many states impose special rules for non-resident executors or require them to obtain a bond. An executor who lives outside the area may also find it more challenging to maintain the deceased’s property.
How capable are they? A business or legal background is helpful but not necessary. Executors often should work with an attorney and an accountant. Honesty, intelligence, discipline, organizational skills, and the ability to communicate well are essential.
Are they willing? Never name an executor without asking their permission.
Are they still the right choice? Just as you do with beneficiaries, it’s important to review your decision periodically if something has changed. Perhaps there has been a divorce, or the person you designated has developed a health condition.
Should you consider a professional? You may want to name a third-party executor under specific circumstances. Some instances may be if you have a blended family, your family dynamics are complicated, or you want to make things easier for a bereaved spouse. A bank, trust company, or a professional who has experience dealing with estates can serve as an executor. Executor fees vary from state to state but often range between one and five percent of the estate.
Estate planning can be complex and getting it right can alleviate a lot of stress and heartache down the road. We are happy to work with you, your attorney, and your tax professional to find solutions for your situation. Please don’t hesitate to reach out to connect us or with any questions you may have.