How To Choose an Executor for Your Will
When you pass away and your will is approved for probate, your executor takes on your role in which they can carry out all the legal duties you’ve done in the past. This comprises of selling your property, paying-off creditors, bringing legal actions, examining medical records, and allocating your assets to others. Obviously, serving as an executor is an important responsibility, so who should you decide on to manage your closing personal affairs? What characteristics make for a good executor, and who by default is incapable of serving?
Choose Only Responsible Parties
The most important attribute your executor is required to have is responsibility. You don’t have to be a lawyer, CPA or a financial advisor to be an executor. You just need be responsible enough for hiring the right people to assist you, address estate issues quickly, sufficiently communicate with beneficiaries and make difficult decisions when needed. Don’t forget that an executor is going to get paid a commission for carrying out their duties, so you should expect them to seek their responsibilities as they would for any other duty.
When you do not have any responsible friends or relatives, you can appoint a lawyer, CPA, financial institution or trust company as executor. Nevertheless, these parties typically charge additional costs for their services (like an CPA billing separately for preparing your estates tax returns) or request higher payments than a friend or relative (financial institutions and trust companies usually decline to serve unless they make near-exorbitant commissions).
Consider Parties in Good Financial Health
Your choice of executor needs to have adequate personal finances of their own. People that have a lot of creditors and liens on them, parties with no credit history and those that have declared bankruptcy are not ideal choices, because they usually can’t get bonded.
“Bonding” is a type of insurance a lot of courts might require, that serves as paying beneficiaries should an executor flee with estate funds. When the bonding company deems an executor is a terrible financial risk and is not going to extend a bond, the court is going to likely not permit your choice of executor to be appoint.
Appoint at a Minimum One Younger Successor
It is not unusual to only create one will throughout your lifetime, and because wills do not expire your estate might be probated through a will that is more than thirty-five years old. Obviously, many things can change throughout that time. Whereas you are only going to need to appoint one executor for making your will legitimate, you should attempt to appoint at a minimum one alternative younger, healthy replacement executor that is probably going to outlive you in case you only create one will throughout your lifetime and your initial choice of executor passes away before you or declines to serve.
This can either be accomplished by explicitly appointing the person (“If my husband cannot serve, I appoint my friend April Seddio”) or by devising a means in your will (“Any of my children that are at least 35 years old when I pass away is going to operate as Successor Co-Executors”).
Don’t Be Concerned: Location Typically Does Not Matter
Your executor does not need to live near you. Certainly, they might want to make a face-to-face visit to your house to guarantee your personal belongings are allocated and to convene with your estate’s attorney, but a lot of their duties can possibly be accomplished without ever coming to your city. Should your estate need a service, like the removal of the furniture in your condo, it is possible they can hire a company to do it for them and pay a responsible individual to be present while that service is carried out.
No Dramatics, Please
A lot of individuals may have trustworthy friends or relatives that are the estate’s only beneficiaries, but they don’t get along. This is often the case where brothers and sisters don’t like each other, or when one of them took care of their parent the last several years of their life and is receiving the same inheritance as their brother, who didn’t even contact his parent throughout that time. If only one of the parties is appointed as executor, they might use their position to take revenge on the other individual by creating delays, creating trouble or simply being nasty.
In this case, there are two choices: Either appoint both parties to serve with one another to force them to work alongside each other (therefore avoiding an unfair playing field) or appoint neither of them (and minimizing court conflict). The latter approach is usually better.
Don’t Name Disqualified Individuals
One of an executor’s main purposes is sighing checks. Courts usually do not approve executors that have challenges getting jurisdiction over, in addition to people that have a criminal past. Consequently, non-US citizens living outside of the US usually cannot operate as sole executors, and former felons are almost always ineligible from being appointed.
Don’t forget that minors unable to serve as executors, and if you do appoint a person that is presently not a minor it is typically better to only enable them to serve if they have reached a certain age, because a lot of eighteen-year-olds might not be ready to manage executor duties.
Think About An Individual That has Patience and is Emotionally Grounded
Most importantly, you are going to want an executor that can manage doing hard work without hesitating, keep emotional stability and enforce tough love to beneficiaries. At some degree probate has not changed much in the last six hundred years, meaning the system that was initially designed for transferring land and livestock now allocates qualifying holdings, patents, and corporate trade interests. Errors can easily be made, clerks might disagree on their method to validate documents or court procedures, and middlemen are going to get confused.
Deciding on the individual to designate as the executor of your will can be challenging. In the end, it’s possible you have never had to make this decision before. You might not even understand what the responsibility of executor (or personal representative) entails.
What Does the Executor of a Will Do?
An executor is an individual designated in your will or designated by the court should you not have a will. They have a responsibility, legally, to see that the conditions of your will are adhered to and that a deceased individual’s affairs are finalized.
General executor responsibilities include:
- Managing property until the estate is settled (housekeeping)
- Collecting any outstanding liabilities owed to the deceased on the estates behalf
- Collecting life insurance policies
- Paying estate bills
- Filing the deceased final tax returns
- Filing the tax return for the estate
- Allocating property in accordance with the will
- Attending probate court to report on the estate
Who Should I Designate as My Executor?
Since most wills are direct, slight legal or financial understanding is needed to be an executor. It’s normal for individuals to name relatives or friends as their executor like their:
- brother or sister
- adult child
- trusted friend
Since the duties of probate are going to require going to court and maintenance of property, it can be beneficial to pick an executor that lives close to the estate/house.
Additionally, when possible, go over the job responsibilities of the executor of your will with the individual you want to designate as your executor. It’s vital that the individual be agreeable to serve and that they have knowledge of where your financial institution accounts and records are kept.
Beneficiaries as Executor
It’s not unusual to choose an executor from those that are going to inherit property under your will. Self-interest should guarantee that they are going to safeguard assets and maintain real estate and that the process is finished in a timely fashion.
Friends and Family are Not Required to Be Your Executor
Should you not have living relatives or friends, you are able to hire a financial institution, a trust company, an accountant, a corporate trustee, or a probate legal firm.
Can I Name Co-Executors?
Usually, individuals are concerned about the responsibilities of being executor. They have never done it previously and feel doubtful. You — and they — might feel more comfortable if you designate a co-executor. This does not divide the responsibilities or lessen their fiduciary duties. Each co-executor is completely responsible for guaranteeing the duties of probate are completed. But it does offer two people to carry out the work.
Some individuals designate co-executors to evade the appearance of favoritism. For instance, they might designate two adult children. The co-executors are going to need to have a good working partnership.
Are There Limitations on Who I Can Designate as My Executor?
All state’s laws vary, but generally, the following people cannot be designated for the role of an executor:
- Children under eighteen
Many states necessitate that non-state resident executors also to be primary beneficiaries. Go over your state’s probate law conditions or ask your estate planning lawyer prior to you choosing an executor.
What Characteristics Should I Consider When Deciding on My Executor?
Whereas an executor does not require particular legal or financial understanding, it definitely helps the probate process progress efficiently should the executor has the characteristics of:
- Detail attentive
- Good communication skills
The reason for good communication? Since family dynamics are exceedingly vital following a death in the family. An executor that cannot, or will not, communicate can exacerbate existing disagreements. This might bring about to family conflict, will challenges, or other estate legal proceedings.
Whether they should or not, your heirs might think there is ill intent in your choice to designate this or that individual as the executor. It can help to talk about your choice with relative when drafting your will, so they comprehend your reasoning.
Should I Designate an Alternate Executor?
It’s a good idea to designate an alternate executor when creating your will. Your first choice for executor might reject the duty when the time comes to put in the work. They might have moved away. Or they might have passed away. If you have designated an alternate executor, that individual is going to be asked to fulfill the role by the probate judge.
Should your designated executors be unable or disinclined to serve, the court is going to decide on an executor for your estate.
Does the Executor get Paid?
An executor can get paid for their services. The funding to pay the executor comes out of the estate itself. The executor is not required to pay the estate’s costs out of pocket. Nevertheless, some states require non state resident executors to acquire a bond to safeguard the estate from unjust use of assets by the executor. Verify with the laws in your state and make sure that whoever you decide on is able to cover the upfront expense of such a bond.
A lot of states permit a “reasonable fee”; some state laws set a cost as a definite percentage of the estate assets. Relatives do not always bill for their services as executors, but you are going to pay a fee for hiring a professional for this service.
If the will is complicated, or if considerable court time is required, an executor might want to hire a probate lawyer to help in the managing of the estate, also at the expense of the estate.
Does My Executor Need to Hire a Probate Lawyer?
The probate process is somewhat routine, and most individuals can complete it with little to no help from a probate lawyer.
On the other hand, there may be reasoning an executor wants to work alongside a probate lawyer, like:
- If the executor is uneasy with their role and would like a lawyer to provide legal counsel to guarantee things are done correctly
- There are loads conflict among the heirs and the executor is concerned with a legal challenge or probate case
The executor might want to consult a lawyer or a CPA if the estate:
- Is complicated
- Includes a business
- Includes real estate that might have legal issues
- Could be subject to considerable tax liability
In conclusion, executors shouldn’t be scared to ask the court for help. Should the probate judge feel that it is necessary, they are going to advise the executor to hire a lawyer.
Speak With Your Estate Planning Attorney About Deciding on an Executor
An experienced estate planning lawyer has assisted a lot of individuals in making difficult decisions concerning legal documents. Whether it’s deciding on an executor for your will or a guardian for your children, they can aid in guiding you to a decision with which you are going feel comfortable. Contact an estate planning lawyer near you.
Staff, F. L. (2022, June 9). How to choose an executor for your will. Findlaw. Retrieved October 4, 2022, from https://www.findlaw.com/estate/estate-administration/choosing-the-executor-faq.html
Estate Planning Attorney in Phoenix, Arizona
Here at Ogborne Law, we are proud to include estate planning among our services. Your estate planning attorney will work closely with you to draw up all the documents you’ll need to communicate your wishes to the court. We’ll take the time to answer all of your questions and guide you through this important process. If you’re ready to start your consultation with Ogborne Law, visit our Estate Planning Consultation request page.
There are so many aspects to consider in estate planning, and we haven’t even touched on those individuals who own a business!
You’ve worked hard for your life, and you need to protect it. You owe it to your family and your legacy to take care of planning now.
Contact Ogborne Law to schedule your estate-planning session.