A key decision you must make when drafting your estate plan is who to appoint as the executor. In a nutshell, an executor (called a “personal representative” in some states) is the person who will carry out your wishes after your death. Let’s take a look at the specific duties and how to choose the right person for the job.
Overview of an Executor’s Duties
Typically, your executor shepherds your will through the probate process, takes steps to protect your estate’s assets, distributes property to beneficiaries according to the will, and pays the estate’s debts and taxes.
Most assets must pass through probate before they can be distributed to beneficiaries. (Note, however, that assets transferred to a living trust are exempt from probate.) When the will is offered for probate, the executor also obtains “letters testamentary” from the court, authorizing him or her to act on the estate’s behalf.
It’s the executor’s responsibility to locate, manage and disburse your estate’s assets. In addition, he or she must determine the value of property. Depending on the finances, assets may have to be liquidated to pay debts of the estate.
Also, your executor can use estate funds to pay for funeral and burial expenses if you didn’t make other arrangements to cover those costs. In addition, your executor will obtain copies of your death certificate. The death certificate will be needed for several purposes, including closing financial accounts, canceling certain benefit payments and filing the final tax return.
Make Sure You Have the Right Person for the Job
So, whom should you choose as the executor of your estate? Your first inclination may be to name a family member or a trusted friend. But this can cause complications.
For starters, the person may be too grief-stricken to function effectively. And, if the executor stands to gain from the will, there may be conflicts of interest that can trigger contests of your will or other disputes by disgruntled family members. Furthermore, the executor may need more financial acumen for this position. Frequently, a professional advisor you know and trust is a good alternative.
Don’t Forget to Designate an Alternate Executor
An executor can renounce the right to this position by filing a written declaration with the probate court. This further accentuates the need to name a backup executor.
Without a named successor in the executor role, the probate court will appoint one for the estate. If you have additional questions regarding the role of an executor, please contact us.
