Plan Carefully When Choosing Your Executor
One of the more important decisions you must make when writing your will is the selection of an executor. Ideally, an executor should combine the tact of a diplomat with the administrative skills of a professional executive. The person should also be close enough to you and your family to do as you would wish, yet be able to act without being swayed by emotions if conflict breaks out among family members.
Almost any person you trust can be your executor. For most people, the best choice is a spouse, close friend, or associate, who may also be a beneficiary. Large estates may require two executors—a personal representative to interpret your wishes and a professional representative or institution, such as your attorney or a bank, to make business or financial management decisions, pay taxes, and keep records.
Duties of an Executor
What exactly does an executor do? An executor’s job is to “wrap up” your financial affairs. The individual must identify and determine the value of the assets that are part of your estate. (Trusts, life insurance policies, pension plans, and some types of jointly owned property may fall outside the executor’s authority.) Certain assets necessitate hiring an appraiser, whose fee generally comes out of your estate’s assets, as do expenses for lawyers, accountants, and other professionals. An executor is also responsible for paying all your remaining debts, filing tax returns, and distributing whatever remains to your heirs.
Throughout this process, careful records must be kept. Most probate courts will demand a full and detailed accounting of all money received, spent, or held by your estate.
If You Die Intestate. . .
If you die without a will (intestate), the court will appoint an administrator to perform the executor’s duties. When no relative or beneficiary is able to take the job, the appointee is likely to be a civil servant or even a creditor.
Administrators and executors usually receive fees of 3% to 5% of an estate. However, when family members serve, they typically waive the fee. Administrators must post a bond to safeguard the financial interests of your heirs, although in some cases the heirs may consent to waive the bond. The cost of the bond premium also comes out of the assets that would otherwise go to your heirs.
Making the Right Choice
When choosing an executor, objectivity is essential in order to make the proper decision. Be sure whomever you select is willing to accept the responsibility. In addition, it is also wise to choose an alternate executor to serve in the event your initial executor is unable to do so. If you have not yet selected your executor, consider choosing one now to eliminate any potential complications in the event of an untimely death.
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