Wanted: Capable Executor of My Will
You
have spent a lifetime building up your assets and personal possessions.
After years of hard work, you have an estate to pass along to your
family someday. It only makes sense to carefully choose the right
person to handle your estate as executor of your will (also known as a
personal representative). A proactive approach keeps you in control of
your hard-earned legacy. Timing is everything: appoint and
prepare your executor while you are still able to decide and
communicate your wishes, and your legacy can live on as you want it to,
not as the courts would decide.
If you do not appoint an
executor, the courts will. Sometimes the court-appointed executor is
called the administrator; this person may be someone within or out
of the family. Obviously, in this scenario, you as the owner of the
estate have not communicated your wishes in advance to the
administrator. The law does determine how the executor progresses
through his or her duties related to the estate.
Being an
executor entails a substantial amount of work, time, and
responsibility. The ideal and most capable person may be someone in or
outside the family, so consider carefully who would work best with your
family. Also think about who might replace this person if
necessary.
Suggestions
for finding the right executor:
- Discuss
with your lawyer the people you are considering as your executor. Ask
for some literature which outlines the duties and responsibilities of
an executor. Thoroughly review this information.
- Before
appointing an executor and signing your will, ask the people you are
considering if they would be your executor and if each is willing to
accept the responsibilities. Provide each of them with a detailed
description of the job and share what it means to you personally. Be
prepared to show them your will.
- If you do not know anyone who
would be a suitable fit to be your executor, consider naming a lawyer
or a trust company. This is especially important if your will contains
trusts or other investments which may continue for a number of years
after your passing.
- It may be necessary to find
co-executors. Consider a combination of family members, friends, your
bank, and/or a trust company.
As you think about the best person for this position, look at it like a
job opening. Does this candidate have the right qualifications for your
needs? Would this person respond to learning about the
executor’s
job, what to expect in your estate, where to find appropriate
information, and be willing to carry out your wishes?
Here
is a detailed job description for “Executor of a Will” that will help
you decide if the candidates you are considering fit the bill.
“Executor
of a Will” Job Description
If you
are considering being an executor for someone – see the will first
If
you're seriously considering taking on the responsibility to be an
executor, you should do the one thing that hardly anyone does before
saying yes. Ask to see the will.
"Well over 90
percent of my clients have not seen the document before the person
died," says Jon Gallo, senior partner in estate planning for the law
firm of Greenberg, Glusker, Fields, Clayman, Machtinger and Kinsella in
Los Angeles. "Even more rarely have they seen a financial statement.
They don't know what they're getting into."
Taking a look at
the will gives you critical insights, such as whether the person plans
to "disinherit" anyone (a lawsuit in the making), or plans to donate
everything to a charity (potentially several lawsuits from unhappy
heirs), or has substantial assets to manage, such as a business or
investment property.
It also will tell you if the estate is
large enough for a bank's trust department to handle it, or if you're
going to get stuck doing it all yourself (after you hire an accountant
to file the taxes and an attorney to handle the probate court filings).
If your heart is telling you to say yes, but your head is begging you
to run in the other direction, agree to be a co-executor with a bank or
a trust company. That way, the bank handles the legwork and you provide
guidance on how the deceased would or wouldn't have liked assets to be
disbursed or investments managed. For instance, a co-executor could nix
an investment in a casino if he or she knew the deceased strongly
opposed gambling.
Source: Excerpt from
an article on Bankrate.com by Pat Curry, “Estate executor: No job for
amateurs” |
Responsibilities:
- Have
the will probated. Most jointly owned assets pass to the surviving
owner, without probate. If the deceased person's property is
worth less than a certain amount (how much depends on state law), it
may be able to go through a streamlined probate process.
- Collect
the decedent’s assets, which are specified in the will. This does not
include joint property, insurance and pension benefits payable to named
beneficiaries, etc. If there is a will, the executor reads it to
determine who gets what assets. If there is no will, the executor has
to study state law, called intestate succession statutes, to determine
who the deceased person's heirs are and where the property goes.
- Pay
debts of the decedent. This includes medical bills, funeral expenses,
etc. If there is a probate proceeding, the executor must officially
notify creditors of it, following the procedure set out by state law.
- Pay administration expenses
of the estate.
- Pay
any taxes due from the estate. These include final income taxes, gift
taxes, the federal or state estate taxes due, if any, and income taxes
on income earned by the estate during the period of administration.
- Invest and manage the
estate's assets and provide for the management of any real estate.
- Manage
day-to-day details. This may include terminating leases, credit cards,
and magazines, and notifying banks and government agencies – such as
the Social Security Administration, the post office, Medicare, and the
Department of Veterans Affairs – of the death.
- Once all the bills and taxes
are settled, distribute the remaining assets according to the terms of
the decedent's will.
Source: The
Association of the Bar of the City of New York, 2011.
Job-share
option:
More than one person can be assigned in your will as an executor,
making the job easier for those involved.
Qualifications:
- Financial attentiveness
- Integrity
- Trustworthiness
- Organized and responsible
- Diligent
Training:
Provided
by owner of the estate and/or his or her attorney. Includes topics such
as personal wishes; where to find important paperwork, such as a will,
bank accounts, investments, business interests, life insurance policy,
etc.; and what course of action to take with the estate.
On-the-job
support:
- If the executor feels the
estate is too complicated to handle, he or she may hire a lawyer for:
- Advice on duties as an
executor.
- Opinions about the meaning of
the will.
- Advice on locating a will, if
there is no apparent will.
- Drafting legal documents,
such as deeds and other conveyance documents.
- Probating the will, if
necessary. Applying for probate includes completing a number of
documents to be filed with the courts.
- Preparing documentation with
regard to distribution of the estate.
Note: all reasonable legal fees are paid by the estate.
Length
of appointment:
A couple of months to a couple of years, depending on the size and
complexity of the estate.
Compensation:
Commission
only. Executor receives a percentage of the estate, which is calculated
as a percentage of the value of the probate estate. The probate estate
is all property that the decedent owned individually at the time of
death. This may include business interests, real property, stocks,
bonds, bank accounts, brokerage accounts, automobiles, tangible
personal property, works of art, furniture, jewelry, and collectibles
(The Association of the Bar of the City of New York, 2011).
Review
your executor appointments occasionally and confirm that they continue
to be the best possible choices. It is possible that a person
you
named as an executor may experience a change in circumstances, such as
declining health, personal or financial turmoil, a move out of the
country, etc. If this is the case, find a different person and change
the appointment with your attorney. Finding a capable person whom you
trust to fulfill the job as executor of your will provides you with
peace of mind that your estate will be handled well and comfort will be
afforded for your family during a difficult time.
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