Q: Who should I name to be Executor of my Will?
A: Choosing an Executor is one of the most important decisions you make when you plan your estate. When you name someone as Executor you are giving them a job with substantial responsibilities, not just an honorary title. Being Executor can be time-consuming and difficult, and holds the potential of personal liability for mistakes made.
The Executor is responsible for carrying out the administration of the estate, filing necessary documents in Probate Court, collecting the assets of the deceased, paying debts, distributing the assets as directed by the Will, and filing any necessary tax returns. The job can last 9 to 12 months if there are no problems. In a complex estate with assets that may be hard to manage or sell or where family relationships complicate the administration, the executor’s job can last for several years. The Executor can be held personally liable for mistakes such as distributing all the assets before the taxes are paid.
Most people choose a trusted family member or friend to be Executor. Some choose a professional advisor or a corporate entity as their Executor. If you prefer to name a family member or friend, choose someone with a business or financial background, someone who is good with paperwork and attention to detail. Once appointed by the court, an individual Executor can hire an attorney, an accountant, appraisers, investment advisors and others they will need to advise them in various aspects of the executor’s job.
A bank or trust company is the type of corporate entity that can serve as Executor. A corporate entity will have staff who carry out this type of work routinely. Corporate estate administrators are skilled and impartial. They usually take control of the financial assets of an estate and hold those assets in-house where they can easily track all income and disbursements. They charge a fee for their services, usually a percentage of the assets. A corporate Executor can be well worth the cost, particularly if the estate is complex or where difficult family relationships make the estate administration particularly challenging.
Sometimes the best solution is to name two or more Co-Executors, with one being a family member or friend and the other being a professional advisor or corporate entity. This can give you the best of both worlds, with the friend or family member providing the personal knowledge of the family, and the professional advisor or corporate Executor providing the needed expertise. Whatever you decide, don’t underestimate the responsibilities that you are giving to the person you name as Executor.