How to Choose the Right Executor for Your Estate
When it comes to estate planning, many people view choosing an Executor (also referred to as Personal Representative) as the easiest part of the process. However, when planning your Will, choosing the right Executor can be one of the most important decisions you’ll make; one which may impact every aspect of your estate’s administration. Filling this position with the wrong individual could lead to lengthy delays, inaccurate paperwork, disputes between heirs, misspending of funds and even contesting of the Will.
Here are some key points to consider:
The Executor’s Role
When you ask someone to be your Executor, you’re asking that person to manage the entire execution of your estate. An Executor ensures that the administration of estate runs smoothly and that all your wishes are respected. Actual duties run the gamut, including filing the appropriate papers, inventorying the estate, and using funds to pay costs like taxes and lawyer fees. Additional responsibilities involve paying off debts, cancelling credit cards and bank accounts, and informing all relevant government agencies and creditors of the death. Beyond these responsibilities, this person must also be sensitive to possible tensions or perceived slights between family members and friends. In essence, depending on the complexity of the estate and family relations, an Executor might need to take a turn as a peace-maker, confidante, money manager and caretaker.
The Essential Qualities of an Executor
Given all the responsibilities of an Executor, the ideal individual should be trustworthy, reliable and have superior organizational, time-management and communication skills. If he or she has financial or legal acumen, all the better. Proximity is also a key consideration. It’s often a good idea to choose an Executor who can work with the probate court, beneficiaries, banks and organizations in your hometown in person if needed. Obviously, the importance of each of these qualities depends on the size of your estate and the number of beneficiaries. If your investments are few and you plan to leave all of your estate to one person, such as a spouse, then the demands on your Executor will be few and relatively straightforward. However, if you are a high-net worth individual with cash, investments and property, and you have many beneficiaries and perhaps some charitable beneficiaries in mind, your Executor may face a herculean task. Picking someone with the relevant skills is paramount.
What Kind of an Executor is Right for You?
If your estate is modest or doesn’t involve many beneficiaries, you may be able to select a relative or close friend as Executor. However, make sure you ask your potential Executor’s permission; it would be unfair to impose the duty on someone who does not feel up to the task. And remember, even though you name an Executor is your Will that person does not have to agree to take on this role. So it is important that you name at least one alternate Executor. If you decide that your estate is too complex for a relative or friend to handle, hiring a professional Executor is an excellent option. Choosing a professional can ensure that your estate is expertly managed, and can prevent disputes between family members who feel slighted that you chose one relative over another. Accountants and lawyers can act as Executors, as can trust companies. Generally, professional Executors charge a per-hour fee.
In the end, picking the right Executor in your Will comes down to choosing someone who has the skills, time and willingness to take on the task.
The views expressed are those of the author only. For educational purposes only. Penn Mutual and its affiliates do not provide tax or legal advice. Please talk to a licensed attorney regarding your specific situation.