Beyond Wills: The Crucial Role of Executors
Choosing the right executor for your will is crucial, yet often overlooked. While most people understand the importance of creating a will, many underestimate the vital role of the executor.
A survey discovered that many Americans do not have a will. Even among those who do have a will, many have not considered who will execute their wishes.
Many people in the US receive inheritances. Over 20% of households and 40% of individuals over 70 are affected. This is worrying.
Think of your will as a roadmap, and the executor as the driver. Without a clear plan and a capable driver, navigating the estate settlement process can be lengthy and stressful. Studies show that estates without wills take significantly longer to settle compared to those with an uncontested will. Choosing a responsible and trustworthy executor is essential to ensure your wishes are carried out smoothly and efficiently.
What does an executor of a will do?
Being an executor is more than just signing papers and handing out money. It's stepping into the shoes of a loved one who's gone, carrying out their wishes and navigating a complex legal process.
Executors, also known as personal representatives, are responsible for following the deceased's legal documents, like their will, and distributing assets to beneficiaries.
While the role might seem simple, choosing the right executor is crucial. Often, families assume the eldest child will automatically take on this responsibility, but that's not always ideal. Consider siblings, other relatives, close friends, or even a trusted financial institution.
Being an executor is demanding, especially for someone close to the deceased. It's time-consuming, emotionally taxing, and requires organization and attention to detail.
Choosing the right executor requires careful consideration. Look for someone trustworthy, organized, and comfortable handling legal and financial matters. Consider their time commitment, availability, and emotional resilience. Remember, you're entrusting them with a significant responsibility.
Administration is Job One.
Being an executor isn't just about reading a will. It's about becoming a temporary CEO of someone's life, navigating legal hurdles, managing assets, and ultimately honoring their wishes.
Here's what your chosen executor might face:
Probate court: Their first step is getting legal authorization to carry out the will's instructions.
Professional help: Depending on the complexity, legal and financial professionals may be needed.
Final taxes: Filing the deceased's final tax returns ensures everything is settled.
Asset hunt: Locating and securing everything the deceased owned is crucial.
Final arrangements: From saying goodbye to notifying loved ones, these details deserve care.
Debt settlement: Paying off remaining debts ensures financial clarity.
Family and friends: Consulting with those close to the deceased can be invaluable.
Paperwork mountain: Keeping detailed records of all transactions and distributions is essential.
Accountability is key. In most states, the executor must report to the court with meticulous documentation of everything received, spent, and distributed. This ensures transparency and protects all involved.
Remember, choosing an executor is a big decision. Consider their trustworthiness, organizational skills, and ability to handle legal and financial matters. This is no small task, so choose wisely!
Consider bringing in Professional Help.
One person is unlikely to have all the skills needed to manage the complexities of executing a will. These skills include organization and financial knowledge. Nonetheless, be careful if you are considering appointing multiple individuals as executors.
Designating more than one person can pose challenges if they disagree on handling specific matters. Clarity is essential in determining the decision-maker in such situations.
Opting for multiple executors may also introduce unnecessary complications. Each transaction would necessitate signatures from all appointed individuals, extending the process and potentially causing delays.
Instead of risking potential conflicts, involving external professionals—such as a lawyer, accountant, or financial institution—may prove advantageous. While such professional assistance incurs costs, the estate can cover associated fees.
Adding a bank or institution as co-executors with a family member can balance family knowledge with impartial oversight. This arrangement allows for both perspectives, ensuring a smoother execution of the will.
Don't Overlook Soft Skills
One important skill for an executor is being able to handle disagreements and make wise decisions during emotional times.
When dealing with the loss of a loved one, emotions run high. Consequently, individuals may struggle to think clearly or make sound decisions for the future.
People might act impulsively, only to regret their choices later. For example, they may quickly sell the family home after a parent dies, but later regret their decision. In these cases, it's important to help them, talk with them, and focus on meeting their urgent needs first. This often involves providing psychological support and acting as a counselor to prevent regrettable missteps.
Bottom Line
Talking about death, especially our own, can be uncomfortable. This can lead to procrastination on important tasks like making a will or choosing someone to handle our estate.
It's important to write down your wishes for how your affairs should be handled. You should also choose the right person or group to ensure that your wishes are followed. These actions greatly contribute to ensuring that your intentions are upheld.
Sources:
https://www.firstcitizens.com/personal/insights/family/key-considerations-for-choosing-an-executor?
Disclosures:
This information is an overview and should not be considered as specific guidance or recommendations for any individual or business.
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