Every Will names an Executor, the person responsible to administer the Estate. The choice of an Executor is important and cannot be made without a clear understanding of the Executor’s role and responsibilities. In a nutshell, the Executor will identify and gather bank and investment accounts, real estate and any other property owned by the decedent. The Executor will pay all debts owed by the Estate, file applicable Inheritance, Income, and Estate Tax Returns, and will, once everything is done and all bills are paid, distribute the balance of the assets to the beneficiaries named in the Will.
Generally, people select family members to serve as Executor. But there are no hard and fast rules. A spouse is often a good choice, especially if he or she is the primary or only beneficiary of the estate. However, if you do choose a spouse, make sure you have chosen an Alternate Executor as well, in case your first choice is unavailable. Children are also frequently chosen as Executors, but be aware that multiple Executors must agree.
Here are four important things to consider as you select your Executor:
1. Choose someone who is competent to handle an Estate and is also willing to take on the personal responsibility for proper administration. This is not just an honorary position. The executor usually works closely with an Estates Attorney, but the Executor still has to be sure that everything is being done correctly.
2. When you ask someone to serve as an Executor, clarify with that person whether the Executor will be compensated. Sometimes, in close family situations, the Executor may devote significant time to the administration of the Estate but feels sheepish about asking for compensation. Executors are always entitled to compensation, so you want to ask your Estate Planning Attorney how that is calculated.
3. It almost goes without saying, but choose someone who is financially and personally stable. In some cases the Register of Wills may require an Executor to purchase a bond. This will generally be avoided with proper drafting of the Will. If a bond is required, however, Executors with bad financial records may not be able to obtain a bond.
4. Choose someone with the highest standards of integrity. The Executor will take control of the Estate assets, will sign all the checks and make the ultimate distributions. Honesty and trustworthiness are the hallmarks of great Executors. If you are ready to create your Estate Plan, or if you have been named as an Executor in someone’s Estate, we are happy to help you.