When it comes to estate planning and creating your will, one of your most important decisions will be choosing the executor of your estate. What is an estate executor, what important duties are they responsible for performing, and who is the right person to choose? Read on to learn more about estate executors and how to pick yours.
What Is an Estate Executor?
An estate executor is responsible for making sure that your will is carried out in the right way; in other words, that your estate gets passed on to heirs and other beneficiaries according to your wishes. In this capacity, an estate executor may need to gather together your assets, pay off outstanding bills owed to creditors, ensure your will is legally verified, and take care of the various paperwork involved in settling an estate.
Being an executor can involve a significant amount of work, which is why estate executors are entitled to compensation. Usually, the terms of compensation are laid out in a will. This may be a percentage of the estate, a flat fee or an hourly rate for the work performed.
Qualities of a Good Executor
Legally speaking, almost anyone can be named as an executor as long as they are over 18 and not a convicted felon. Many people name a spouse or younger family member as the executor of their estate, such as a sibling or adult child. On the other hand, it’s also common to appoint an accountant or legal professional to perform this role.
Choosing the executor of your estate is a highly person decision, but some qualities you might look for in a good estate executor include:
- Trustworthy and Honest: The executor of your estate should be someone you trust, without reservations, to carry out your wishes. This is why people often choose a family member, a person they’ve known for a long time, or a corporate executor with extensive professional experience in the field.
- Organized and Responsible: Performing the duties of an executor requires plenty of time, coordination and paperwork, so it’s a good idea to choose someone who you know is up to the task of sorting out taxes, life insurance payouts, and possibly court appeals.
- Financially Knowledgeable: While it’s not necessary to name a financial professional as your estate executor, it can be helpful to choose a person who already has a strong foundation of knowledge about money, taxes and other financial details.
- They Agree to the Role: Check in with your intended executor to make sure they are willing to take on this responsibility. You can also name an alternate executor if there’s a chance that the person you name in your will won’t be able to fulfil the executor duties.
Choosing a Corporate Executor
There are a number of advantages to naming a corporate executor as opposed to a family member or personal contact. A corporate executor is a professional in legal and financial matters, who can fulfil the responsibilities of managing an estate. In addition to their familiarity with estate planning, corporate executors also offer the advantage of being impartial—as opposed to naming an estate executor who is also a beneficiary of the will.
If you do decide to choose a corporate executor, do plenty of research beforehand and talk with trusted friends and family, to ensure the person you select offers the best combination of knowledge, experience, and cost. Depending on your estate and financial needs, you may wish to find a corporate executor who specializes in a certain area of estate planning, such as tax law, investments or insurance.
Power of Attorney vs. Estate Executor
Appointing someone as your agent with power of attorney means they are authorized to make financial, legal or medical decisions on your behalf, if you are unable to do so. The executor of an estate, on the other hand, is in charge of administrative management for the deceased; specifically, the executor should ensure that all wishes and instructions are carried out as per the estate plan. Your estate executor and your agent with power of attorney may be the same person, but they don’t have to be. Either way, you’ll want a trusted person to fulfil these roles.