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How To Pick an Executor

 

There's a key aspect of creating an estate plan that you shouldn't gloss over: choosing whom to carry out the wishes outlined in your will, making important decisions on your behalf. Select someone who's trustworthy, organized and able to juggle the job along with other life responsibilities.

Here are qualities to look for when choosing the executor of your estate:

  • Responsibility — addressing estate matters quickly and communicating effectively with beneficiaries to make hard decisions when necessary.
  • Integrity — showing fidelity to your final wishes.
  • Diligence — locating and collecting assets you owned and taking physical possession of them if necessary. Executors must secure, insure and appraise assets. They may have to make determinations about the estate's assets — which to retain and which to sell — and how the estate's cash needs will be met.
  • Comfort with tax matters — working with tax and legal professionals to prepare and file your final federal and state personal income tax returns, as well as any returns for prior years and gift tax returns if they weren't filed.
  • Impartiality — making decisions without favoring one beneficiary over another.
  • Availability — settling an estate takes an average of 16 months, so your choice of executor needs to commit time and energy to the tasks involved.
  • Financial responsibility — willingness and ability to manage an estate. If you feel that you don't have responsible friends or family members, you can name an attorney, accountant, bank or trust company as executor. Unlike a close friend or family member, these parties usually charge fees for being an executor, which vary from state to state.
  • Prudence — your choice of executor needs to have suitable personal finances. People with debts and liens, individuals with no credit history or those who have declared bankruptcy are not good choices since they often can't get bonded, and many courts require executors to take out a bond as a guarantee that they won't skip town with the money from the estate.

Also, name at least one younger executor. While you only need to name one executor to make your will valid, you should try to name at least one additional younger, healthy person, known as a successor or contingency executor. This person should be likely to outlive you in case your first choice isn't available to serve.

You want an executor who can handle hard work without hesitation, maintain their emotional balance, and manage the tempers and egos of beneficiaries. Probate is hard for everyone involved. The executor's role is to dispose of the estate with patience and expertise and to communicate with the beneficiaries throughout the probate process.

 
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
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