Choosing the person who will be your executor is an important decision. You want to make sure that you pick someone who is trustworthy, conscientious, and hardworking.
What does an Executor do?
After you die, your executor will perform a number of services, (http://www.courts.state.va.us/courts/circuit/resources/coa/home.html) including:
- Collecting and safekeeping your assets
- Preparing an inventory
- Collecting income
- Paying your debts and expenses
- Selling your house or vehicles, if necessary
- Filing your final tax return and filing taxes for your estate
- Making financial planning decisions about taxes, distributions, and investments
- Distributing your assets to your beneficiaries
- Obtaining receipts and releases from creditors and beneficiaries
- Preparing periodic accountings
- Fielding inquiries and demands from anxious beneficiaries
- Defending your wishes if they are challenged by another person
As you can see, being an executor can be a big job! Make sure that the person you select is someone who can handle these responsibilities. http://www.courts.state.va.us/courts/circuit/resources/probate_in_virginia.pdf
Will my Executor have any help?
Of course, no one expects your executor to be an expert in taxes, financial planning, and the probate system! People with no financial or legal background can be great executors as long as they hire the appropriate help. It is very common for executors to hire lawyers, CPAs, and financial planners to assist them in their duties. Therefore, as long as your executor has good judgement and good organizational skills, it shouldn’t matter whether he or she has much financial expertise. http://www.vba.org/?page=guide_estates
Who or what can be an Executor?
When picking the entity to serve as your executor, you have a few choices.
First, any family member or other individual can serve as executor. If you would like more than one person to serve, you can appoint co-executors. These individuals should be trustworthy, competent, detail-oriented adults. In some cases, an executor needs to be bonded with corporate surety. In this situation, the surety company may require that the executor has financial assets, has never gone through bankruptcy, and is not a convicted felon.
Second, you can appoint a professional, such as a lawyer or an accountant, to be your executor. Of course, a professional will always charge for this service, and that fee will come out of your estate before it is distributed to your beneficiaries.
Third, a corporation with Trust Powers can be your executor. For example, some banks provide this service through their trust department, and companies are specifically created to be trust companies. Of course, these companies and banks require payment, and they may have restrictions on what Estates they agree to service.
What are some bad reasons to pick someone as executor?
Over the years, I have seen some pretty bad choices for executors. Generally, this happens because the person writing their Will is worried that a family member will be offended if he or she gets “left out.” Though I’m sympathetic to these difficult family dynamics, this often creates more drama and hurt-feelings in the long run. Here are some examples of bad decision making:
- “Well, I don’t want one child to feel badly if she doesn’t get picked, so I will just put both daughters as co-executors.” Unless you are CERTAIN that the two children can work well together, do not name them as co-executors!
- “Well, Tracy is not very trustworthy with money. However, I already named Bill as my power of attorney. I have to name Tracy as something, or she will be upset. So, I’d better name Tracy as my executor.” Don’t pick a less-qualified person just to preserve his or her feelings!
Choosing your executor is an important decision. This is not a time to be swayed by hurt feelings or angry children. Instead, try to stay focused on the merits of the candidates, and choose the person who you feel is best suited for the job.