Thursday, December 6, 2012

Choosing an Executor of Your Will

If you own a home or have any other financial assets, you should have a will that explains how you want your assets distributed after your death.  In addition, to simplify the way your assets will be probated, you should also have a trust.

However, before you write your will and set up a trust, there are a number of matters which need to be decided in advance.  First, you must decide how your estate is going to be distributed and you should make a list of any special bequests.  Then, before you meet with an attorney to write your will, you should also choose an executor who will be responsible for seeing that the will is carried out and that all debts and expenses will be properly handled.

Although many people consider it an honor to be appointed the executor of a will, they should also realize that there is a great deal of responsibility involved.  Before you choose an executor of your estate, you should discuss your decision with the person you plan to appoint.  You will want to make sure that they understand the responsibilities involved, and that they feel prepared to carry out the task.  My husband has been the executor for several family members, and it can be a time-consuming task. 

Responsibilities of the Executor of a Will

Listed below are some of the major responsibilities the executor will need to carry out.  Depending on the size and complexity of your estate, there may be additional matters that they will need to handle.

1.  Sort out all the finances of the deceased, including paying debts and taxes.

2.  File a copy of the will with the local probate court.

3.  Obtain multiple copies of the death certificate and send them to the Social Security Administration, banks, credit card companies, insurance companies and any other agencies and businesses where the deceased had an open account. (An executor may need as many as 20 or more original death certificates!)

4.  Open a new bank account to use to deposit funds from the estate and pay bills until all the property has been fully disbursed.  The executor should keep careful financial records.

5.  Maintain the property, such as the house, until it can be sold.  This includes continuing to pay for utilities, yard or pool maintenance, the mortgage payments and property taxes.

6.  Complete a full inventory of the decedent's estate and have valuable items, such as artwork, jewelry or coin collections, appraised.

7.  Make certain that all legal requirements have been met.

8.  Handle the sale of real estate and other property, including stocks and bonds, if necessary for an equitable division of the property between the heirs.  If there is only one heir, it may not be necessary to sell off property.  Even if there is more than one heir, it may be possible to reach an equitable division of the property without selling everything and splitting the proceeds.  The executor will have to ascertain this.

9.  Distribute the assets and bequests to the various heirs, according to the terms of the will.

Who Can Serve as an Executor

In most cases, the executor of an estate is a close relative of the deceased.  For example, in the case of a couple, the executor will often be the spouse.  Depending on the family situation, the executor may be the parent, child or sibling of the deceased. 

If the estate is small, or simple, the relative may be able to handle the job of executor without any outside assistance.  However, if the estate is large or complicated, you may recommend in your will that the executor obtain the services of a probate attorney.  The attorney who writes your will and sets up the trust is the logical person to provide this service.

For example, in our will, my husband and I are the executors of each others will.  If something happens to both of us, we have asked two of our daughters to serve as co-executors.  We have also stipulated in our will that some of the assets of our estate be used to pay for the services of a probate attorney to provide our co-executor with any necessary assistance.  It is our hope that this will reduce the amount of friction that could develop between the daughter who is our executor and her sisters.  We also hope that using a probate attorney will lessen the burden on our daughters.

Choosing Your Executor

Before you make your final choice of an executor, you should discuss these issues and make sure your future executor understands the responsibilities that will be involved.  Then, once your will has been written, be sure your executor has a copy.  In our case, we gave copies to all of our daughters so that questions, concerns and bequests could be dealt with while we were still alive.

In addition, you will want your future executor to have anything else they may need in order to handle the disposition of your property.  For example, we have given our daughters a list of our accounts and insurance policies, information about pre-planned funeral arrangements we have made, a key to our home and all the information we believe they would need in order to handle our estate.  We have even given them our health insurance information, in the event we are seriously injured or hospitalized and unable to communicate this information for ourselves.

Once you have taken care of these matters, you will have the peace of mind that comes from knowing you have done everything you can to make things easier for your heirs once you are gone.

If you are interesting in learning about additional planning you need to do, including financial planning, deciding where to retire, preparing for medical issues that could arise and dealing with changing family relationships, use the tabs or pull-down menu at the top of the page to find links to hundreds of additional articles.

You may also be interested in reading:

Do You Need a Million Dollars to Retire?
How to Publish Your Autobiography for Free
Simplifying Your Life for Retirement
Retirement Income from Annuities or Investment Income

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2 comments:

  1. Thanks for the thorough list of responsibilities an executor can expect to handle. I did it once and I wish I had this information back then. It's thoughtful to plan ahead so that family members don't have to stumble through it all like I did.

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  2. Thank you, Domestic Diva, for your helpful comments. I'm sorry that you had to stumble through your experience as the executor of a will, and I appreciate knowing that you would have found this information helpful.

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