The Three A's of Choosing an ExecutorJuly 28, 2016
Do not jump to give estate executor duties to a family member simply because you wish to honor him/her. Take time to consider who is reliable, caring and organized.
A carefully thought through estate plan needs a qualified fiduciary to ensure its successful implementation. Failing to select the appropriate fiduciary is like stopping short of the finish line.
How Important is Choosing an Executor?
Choosing an executor and trustee is one of the most important estate planning decisions that you will make. More often than not the person chosen to be an executor is a decision based on emotions rather than qualifications. Most view it as an opportunity to honor a family member by bestowing upon them the trust to dispose of their final affairs. This should not be the motivating factor in selecting someone to be the executor of your estate.
So, who is the Right Person for the Job?
The right person will depend upon your individual circumstances. You will need someone who is able, affable and has adequate skills to perform the duties.
Is he/she ABLE? The first consideration is the ability to perform the function. Some things to consider:
- The person cannot be a minor, or a non-US citizen.
- The person should not be disabled or incapacitated.
- The person should have a life expectancy greater than yours and his/her schedule should permit the time needed to administer the estate.
- States have different requirements if the person you are naming as an executor is a nonresident of the state you live in. The nonresident person may have to be a primary beneficiary or a close relative.
- Some states require a surety bond or the appointment of a resident to act as the executor’s representative.
Is he/she AFFABLE? The second consideration is the affability of the person. The executor may encounter situations resulting in conflict and resentment. Difficult and controversial decisions may have to be made to ensure that all beneficiaries’ interests are kept as whole as possible. This will require the executor to remain impartial, be patient and have empathy in dealing with the various parties involved.
Is he/she ADEQUATE? The third consideration is the adequacy of skills the person possesses.
- The person will need to be organized and pay attention to detail.
- He/she will need to have an overall understanding of finances
- The person will need to know when to seek expert advice, select the appropriate experts and be patient enough to deal with bureaucracy.
- If a significant portion of your estate involves your privately held business then knowledge of the business and its industry may also be needed from the executor.
Not Simply an “Honor”
The role of an Executor can be a daunting task. In fact it is a job. It can require a lot of work that may be complex. It will involve balancing expertise, convenience and cost amongst other things. You can choose a family member, a friend or a third party professional representative. One size does not fit all.
Need further guidance? Contact us.