Creating an Estate Plan may include drafting many documents, including things like Trusts, Wills, Durable Power of Attorney (DPOA), Advance Directives, and so on. Putting these documents together requires you to make many decisions, and one of the key decisions is choosing someone to be the Executor of your estate.
What Does an Executor Do?
Before discussing whom you should name, you first need to understand what an Executor’s responsibilities are. The person (or persons) you name as an Executor is responsible for ensuring that your estate is distributed and allocated according to your wishes after you pass away. But this does not just mean reading the Will and handing out assets. There are several tasks that must happen before an estate can be distributed.
Even when someone has a comprehensive Estate Plan in place, several tasks need to be accomplished when someone passes away. Outstanding bills and debts must be paid, and accounts must be closed – including such mundane matters as cell phone accounts or store credit cards. Medical insurance must be canceled, subscriptions canceled, and Social Security or other benefits halted. Tax returns will need to be filed for the deceased and also for the deceased’s estate . . . you start to get the picture. This is in addition to cataloging all the deceased assets and, if necessary or appropriate, liquidating them in order to be able to distribute inheritances.
The person you name as Executor has the responsibility to tie up all these loose ends, which will require obtaining the Death Certificate and providing sufficient documentation to prove to these different parties that the Executor has the authority to carry out these tasks. For a Will, the Executor is responsible for shepherding the estate through the probate process. And all of these matters must be attended to in a timely manner.
Given all these responsibilities and the amount of time and work involved, you can start to get an idea of the sort of person you want to name as your Executor.
Qualities of a Good Executor
The responsibilities outlined above already suggest some necessary qualities that your Executor should have:
- Well organized
- Capable of understanding complex processes and legal requirements
- Emotionally stable
- Possessing a strong sense of responsibility
- Able to dedicate sufficient time and attention to administering your estate
- Legal capacity: at least 18 years old, with a clean criminal record, having US citizenship and living in the US
You can name more than one Executor, and given the responsibilities outlined above, that may be a wise move. Having a co-Executor takes some of the pressure off of each of them. They can assist one another in the performance of these duties as well as act as a sounding board or backstop when it comes to important decisions or items that may fall through the cracks.
Co-Executors should be people who are able to work together well without drama or serious disagreements. At the same time, do not name a committee of Executors – two or possibly three are sufficient. If you designate too many, the potential for delay and disagreement increases. It is also wise to name alternate or successor Executors in the event any person or persons you name are unable to carry out the responsibilities of an Executor for one reason or another. But they should all possess, in some measure, the qualities noted.
Other Things to Consider
In addition to the traits outlined above, consider a few other qualities.
Name someone younger than you. Since you hope to live a good long time, you want to make sure that the person who administers your estate will be in good health and have the energy to undertake all the duties of an Executor without being overtaxed.
Do not hesitate to pick someone who stands to inherit from your estate, including one of your adult children, so long as the person is trustworthy – not just in your opinion, but, to avoid contention, in the opinion of your other heirs. It should also be someone financially stable, so there are no pressing incentives to self-serve or do hurried or shoddy work (for example, someone with excessive debts). If your Executor stands to inherit, that person will be motivated to get your estate settled promptly for themselves as well as all the other heirs.
Finally, if you cannot think of anyone in your immediate family or circle of acquaintance that possesses the qualities you want, you can name a professional Executor. Professionals with a legal background in managing estates have the knowledge and expertise to administer your estate efficiently and properly. While it will entail a fee taken out of your estate to compensate the Executor, that fee may be well worth it.
If you worry that your family members will be offended by you choosing an unrelated third party as Executor, once you explain to them all of the responsibilities the Executor has, your family members may end up thanking you for saving them from the time and hassle of having to handle difficult and unfamiliar work. In some cases, having a professional Executor can be a final last gift to your heirs, saving them from the headache of administering your estate.
Choosing a suitable Executor is a critical component of putting together a good Estate Plan. If you have additional questions about estate planning or if you are ready to put together a comprehensive Estate Plan, give us a call at eLegacy today.