Choosing An Executor
Previous recent posts have emphasized the need for us all to develop and implement an estate plan. One of the necessary steps in doing so is to name an executor for your will and estate. Your executor will act on your behalf when you are deceased and can perform all of the legal tasks you used to do. Some can be mundane, such as paying bills, canceling credit cards, etc., while others can involve more complexity like selling a residence, distributing assets, and filing income tax returns. A good article by Daniel A. Timins, Esq., CFP® in the August 8, 2017 edition of Kiplinger magazine discusses what traits make for a good executor.
- Pick responsible parties only. The individual does not have to be an attorney, accountant, or financial planner, but must readily assume responsibility. Estate matters must be addressed in a timely fashion and communication channels with beneficiaries must remain open. If you don’t have family or friends that can serve, attorneys, accountants, and bank/trust companies will do so. However, be aware these parties charge fees which some may find exorbitant.
- Consider people in good financial standing. People with many creditors, liens, and previous bankruptcies are not good candidates. In addition, some courts require executors to be bonded and people with the aforementioned circumstances may be judged to be too great of a risk by the bonding company.
- Name at least one younger successor. Wills are often in effect for many years prior to the death of the person who creates it. Obviously, things can change during a long period of time and it’s possible the will’s creator may outlive the original named executor. Making provisions for a younger successor executor has often proved to be a prudent move.
- Proximity helps but is not essential. Many of the executor’s tasks can be performed from a distance, especially with modern forms of electronic communication. Even if your estate requires a service such as disposing of furniture from a house or apartment, the executor can hire a company to do the job.
- Account for possible drama. Sometimes siblings do not get along or feel as if one of them did much more to assist the deceased during their declining years. Conflicts prior to death may even escalate during the estate settlement process, so it might be best to avoid naming either of these parties to be the executor.
- Be sure not to name disqualified individuals. Non-US citizens living outside the United States usually cannot act as sole executors. Likewise, convicted felons and those with a criminal past will most likely be disqualified by the courts. Minors cannot serve as executors and it’s worth considering that even many 18-21 year-olds may not have the maturity to handle many executor tasks.
- Look for someone who is patient and emotionally grounded. An executor has to take charge, maintain emotional balance and sometimes administer tough love to beneficiaries. It is hard work and mistakes can be made. Court clerks may disagree on court procedures or even the correct approach to authenticate documents. Financial firms can sometimes present roadblocks as they seek to be certain they are transferring account ownership to the correct party. An executor must be ready to invest a significant amount of time and not expect immediate perfection.
If you would like to learn more about these and other wise financial planning moves, please contact us through our Level 5 Financial LLC website or via phone at 719-323-1240. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.
