June 3, 2014

Who should be the executor of your estate?

When it comes to estate planning, choosing an executor is one of the most important roles to delegate. Basically, their job is to make sure that all requests and wishes made in your will are fulfilled, from arranging the funeral to managing personal assets.

As you can guess, there’s usually quite a bit of paperwork involved in all this, hence the general saying from Daily Finance:

"A common adage in the industry is to name your enemy as your executor as a means of revenge," says John O. McManus, an estate attorney and founding principal of McManus & Associates in New York City. "It's a thankless job. If you appoint someone you love as executor, get your house in order. Otherwise, appoint someone you do not."

Despite those somewhat dreary sentiments, being named executor is an honor and position of distinction. When selecting your executor, consider the following to help ensure that things go smoothly in the event of your death:

If living in a partnership, don’t forget your spouse/partner. Your surviving spouse/partner will be affected financially more than anyone else in the event of your death, so it makes sense that they should be in control of your estate.  If you do name your spouse/partner as executor, you should also name a backup executor in case your spouse is incapacitated or passes away with you.

Review your state’s laws and requirements. Some states have laws that impose special requirements on executorships. For example, some states require that an out-of-state executor must also be a family member or beneficiary; others require a bond to protect your heirs in case of mismanagement, and so on.

Consider someone with a financial or legal background. In the same vein as the previous bullet point, choosing someone with some level of financial or legal background can help ease the learning curve that comes with the legal/financial obligations of the executor position.  However, even if the executor does have that background, it’s still recommended to to seek outside legal and financial counsel when making big decisions about an estate.

It doesn’t have to be a person. If you prefer not to place the burden of the role on someone you know, you can name a third party executor like a bank, trust, or other professional who has experience dealing with estates. There are several websites and resources with directories to help you find the right fit.

After considering the information above and choosing your executor, the next step is to ask them and gain their approval before naming them in your will. Taking the time to go over financial records with them as well as ensuring they know where to find important documents will help ease the process as well after you’re gone.

Also, remember to update your will regularly, especially in the event of a death, divorce, or other event that affects those named in your will.  By taking action ahead of time, you can help ease the grief of your passing by removing the stress of other obligations.

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