Selecting an Executor for Your Estate
In selecting an executor for your estate, it is critically important to choose someone who is capable and responsible. An executor or personal representative, depending on the jurisdiction, is responsible for disposition of assets under a will. An individual such as a relative, a close friend or a professional advisor, such as an attorney or accountant, can serve in this important capacity.
Personal Executors vs Professional Executors
A commonly asked questions are, “What are the advantages of a professional executor vs. an individual executor?” Typically, a professional executor or personal representative is a specialist in handling estate administration. They will certainly be familiar with local laws and procedures regarding the administration of an estate. In addition, a professional executor or personal representative will not have an emotional bias regarding the estate and will be more impartial and more capable of acting independently in accordance with the decedent’s instructions.
In contrast, the advantages of an individual executor or personal representative are based on their personal relationship with the decedent. An individual executor or personal representative is more likely to be personally familiar with the family and family dynamics as well as potentially being more affordable than their professional counterparts. Whatever, type of personal representative you chose, it is important to consider the strengths of both options. Often people will select a form of co-personal representative’s arrangement. This type of structure can often benefit an estate by combined expertise and strengths of the individual and institution.
What Does an Executor Do?
Another common question I hear is, “What does the executor or personal representative do.” The answer, he or she serves after your death and has several major responsibilities including one, administering your estate and distributing the assets to your beneficiaries; Two, making certain tax decisions; Three, paying an estate debts or expenses; Four, ensuring all life insurance and retirement plan benefits are received; and Five; filing the necessary tax returns and paying the appropriate federal and state taxes.
When selecting an executor or personal representative, make sure you choose someone who is is willing to serve. In addition, it is a good practice to have primary and secondary choices in the event that someone is either unable or unwilling to serve. Further, it is also a good practice to consider paying a reasonable fee for the services. The task of serving as a personal representative or executor isn’t easy and not everyone will want to accept the responsibility.
Finally, make sure the executor or personal representative you select does not have a conflict of interest with your estate. For example, selecting an executor such as a second spouse, children from a prior marriage or an individual who owns part of your business may result in an unintended conflict of interest between the selected party and the interests of your beneficiaries. The personal desires and objective of a stepparent and stepchildren may conflict and result in an unintended feud and a coowner’s personal goal regarding your business may differ for those of your family and beneficiaries.