An important question that you will need to answer when meeting with your attorney to have your Will prepared or updated, is who you want to serve as your Executor. The Executor is the person you ask to carry out your wishes as expressed in your Will. Sometimes an Executor is referred to as your “personal representative” because they are there to do for you what you want done after your death. Picking the right Executor therefore is one of the most important things you will do in planning your estate. A good selection will help ensure a smooth transition for your family and relieve some of their stress. Selecting the wrong Executor can cause hard feelings and worse can cause your family confusion and stress.
A recent study showed that there is mass confusion over what the role of an executor actually entails. Start your decision making process by considering the fiduciary nature of the position and its duties. These include: having the Will probated (proven), gathering and inventorying the assets of the estate, determining the valid debts and liabilities of the Estate, filing tax returns, paying the estate’s taxes and valid obligations, settling business interests, filing (unless waived) an accounting with the probate court, distributing property to intended beneficiaries, including making decisions as to what and how to distribute (e.g. distribute an asset with equal value to all equal beneficiaries, or distribute ownership of all or some of the assets to all equal beneficiaries).
There are three general types of people to choose as your executor: (1) a family member or close friend (2) a professional, or (3) a hybrid of the two. What to consider in selecting the best option for your situation?
(1) Individuals (Family Member or Friend)
You can name any person you want to as your executor as long as they are over age 18 and are mentally competent. The individual is generally your spouse, a sibling, an adult child, or a friend. They technically need not have any special training but there is some preferred knowledge and character traits that should be considered.
You should choose someone who is responsible, trustworthy, and is comfortable working with professionals such as lawyers and accountants. The person shouldn’t be a procrastinator. You want somebody who will do the work and not get mixed up with the emotional aspects.
Remember that the executor’s position is a job and the executor is entitled to reasonable compensation. Sometimes, if an attorney is assisting, a family member who acts as executor will forego payment or be paid hourly by the estate for his or her work.
Talk with your potential individual executors. It’s not the best practice to just surprise someone with the job title after your death.
You can name two or more executors (i.e. co-executors) but selecting multiple non-professionals to serve as co-executors may bring more challenges than you intend. Be aware that each will have to sign court filings and other important documents throughout the entire process (which can be anywhere from several months to several years). They will also have to make unanimous decisions on all issues. There is nothing worse than a deadlock.
Do you reasonably feel that your co-executors can collaborate together and still meet the necessary deadlines? They may be on good terms today, but what about in the future?
If you have dysfunction in your family (and who doesn’t?), naming multiple individuals who can’t get along today as your co-executors will not inspire a sense of togetherness. Given the way family dynamics work and the complexity of your estate, if you want co-executors, it may be best to select a professional to serve as co-executor with an individual.
To Be Continued – Part 2 will cover the pros and cons of a Professional Executor and Hybrid Executors.