Choosing the executor of your Will is one of the more important decisions made in estate planning. An executor’s job is to “administer” a Will, and the person chosen should be able to handle your finances and communicate with your family members and other beneficiaries after your death.
After your death, your executor is expected to:
- Collect and protect your assets, including finding and maintaining all bank accounts, investments, real estate, and other property (the “Estate”);
- Pay your outstanding bills using funds from the Estate;
- Handle your business matters, depending on the terms of the Will and agreements with co-owners of your business, if any;
- Pay any estate and inheritance taxes due from the Estate;
- Prepare your final income tax return;
- Close your Estate, either by filing an “account”–or summary of the estate administration–with the court, or having the beneficiaries sign an agreement that the administration was done correctly and the Estate should be closed; and
- Distribute assets to the beneficiaries listed in the Will.
In choosing an executor, you should consider that an executor’s duties take time and require competency to pay bills and handle taxes. The most common choices for executors are close family members or friends. Keep in mind that executors are allowed to seek help from an attorney or other professionals, such as accountants. Executors are also permitted to seek a fee for their services from the Estate, although most executors that are family members or beneficiaries under a Will will waive that fee. If there are no good candidates for executor among your family members or friends, or you are worried about conflicts between your beneficiaries, it may be a good idea to name a neutral third party, such as an attorney or a financial advisor, as executor.