Tips for Choosing an Executor for your Estate
When it comes to creating a last will, one of the things that you need to consider is who you will appoint as an executor. While there is technically no “right” choice, there can certainly be a “wrong” one. In this article, we will discuss what an executor is and provide you with some tips for choosing the right executor for your estate.
If you are thinking about or have written a last will, chances are that taking care of your loved ones is important to you.
What is an Executor?
An executor, or personal representative, is the individual or entity responsible for managing your estate following your death. An executor is a fiduciary. This means that he or she has a legal duty to act in the best interests of the estate.
An executor can either be named in your last will or appointed by a court if you die without a will. Some of the executor’s responsibilities include:
Filing a copy of the will with the probate court
Setting up a bank account to collect funds and pay liabilities
Filing an inventory of the estate’s assets with the probate court
Paying estate debts and taxes
Choosing an Executor
For many people, the decision of who to appoint receives little consideration. They simply fill in the blank with the name of a family member or friend. But that is not always the best course of action. Here are some things to keep in mind when choosing the best executor for your estate.
Go with Someone Responsible
If you are thinking about or have written a last will, chances are that taking care of your loved ones is important to you. So, you want someone that you can trust to honor your wishes. An executor has a lot of responsibilities. This is especially true for estates that have a lot of assets, liabilities, and/or beneficiaries.
That does not mean that an executor must be a professional like an attorney or accountant. But he or she must be responsible enough to hire the right people to help them, communicate with multiple parties, and fulfill fiduciary responsibilities.
Before you appoint an executor, consider whether they have their own affairs in order. Are they organized? Are they able to hold a steady job? Are their own finances in order? If so, great. If not, don’t expect them to suddenly get their act together following your death.
Moreover, someone with poor credit is unlikely to get bonded. A bond is a form of insurance that protects an estate from the executor misappropriating funds. In some courts, if your executor cannot get a bond then it is unlikely that your executor will be allowed to serve.
Choose a Team Player
The administration of an estate can be a stressful process. Loved ones are still coping with the loss. Beneficiaries are concerned about receiving the money and property that was left to them. And family members that do not get along are often forced to work together.
You want an executor that is good with people. Go with someone that will serve as a mediator and look out for everyone’s interests.
Consider Someone Younger and Healthy
The whole point of naming an executor is that he or she will survive you to oversee your estate. Avoid choosing someone that is the same age as you or has a chronic health condition.
Avoid Those that May Be Disqualified
There are certain situations where the executor named in your will can be disqualified and unable to serve. For example, convicted felons are generally unable to serve as executors. Individuals under the age of 18 (21 in some states) are disqualified. As are those that are not residents of the U.S.
Note that the law in each state is different and that further restrictions may apply. For instance, North Carolina excludes those that are illiterate. In Nevada, habitual drunkards are disqualified.
Also, if an attorney drafted your will, do not name him or her as your executor. The attorney will have a conflict of interest. You can, however, appoint another attorney to serve as your executor.
While an executor does not need to live close to you, there are some reasons to choose someone local. Executors may need to visit your home, attend meetings, and appear in probate court. That being said, technology has made it easier to manage affairs from virtually anywhere.
So, consider the role, if any, that location will play in the administration of your estate when naming an executor.
Some people appoint multiple executors. This could be because they are afraid of offending one party or that they will somehow keep each other in check. Yet co-executors generally further complicate the process. Both executors must be involved in every decision and sign every document, creating a logistical nightmare.
Consider a Professional
When it comes to choosing an executor, most people think that naming a family member is best. Yet there are some situations where appointing a family member is not practical. First, there may be no family members or friends that are capable of serving and/or are disqualified under state law.
Second, the estate may involve complex assets and liabilities that are best administered by a professional. Considerations like the valuation of assets and tax selections can be confusing and if done incorrectly can cost beneficiaries money.
Third, a professional is a neutral third-party. Where family dynamics are strained, a professional can ensure that the process moves along smoothly. Finally, serving as an executor can be a lot of work. Delegating the responsibility can give beneficiaries peace of mind while ensuring that their interests are protected.
Heirloom: An Intuitive DIY Attorney-Reviewed Will Platform
At Heirloom, our intuitive DIY Will platform makes it easy to create a Last Will from the comfort of your home. Unlike other DIY platforms, our service includes review by a licensed attorney to ensure that your Last Will is valid and enforceable.
This includes ensuring that the executor named in your Will complies with applicable state law. With lifetime access to our platform, you can easily update your Will at any time, allowing you to name a new executor as circumstances dictate.