Over the next few decades, Americans will transfer about $3 trillion worth of wealth to friends and family through estate planning. On average, it costs about $14,225 to settle an estate. If you are writing your will and estate planning, the first question you need to ask yourself is who should be your estate executor.
Finding the right estate executor will help you transition your estate to your family and friends with ease and convenience.
Of course, it’s not as easy as it sounds. Finding someone to leave in charge when you pass away who is trustworthy and organized is a difficult task. Keep on reading for your complete guide to choosing an estate executor.
What Is the Role of an Estate Executor?
An estate executor is a person or corporation named in the will who is legally responsible for protecting your home and assets until the probate process is complete after you pass away. The main job of an estate executor is to distribute the assets as set out in the will. This process is called probate and can take about one year to 18 months to complete.
Understanding the Probate Process
To understand the role of the estate executor, you need to understand the probate process. Probate is the court process of transferring assets from the deceased’s estate to his or her beneficiaries. Download a free probate checklist today.
Below are some estate executor tips to help you learn more about the top tasks of an estate executor. They can be helpful if you are considering asking someone to be an estate executor or you yourself are thinking of becoming one.
Locate and Protect Assets
When Tony Hsieh, the founder of Zappos died, he was worth hundreds of millions of dollars. The family claimed that Tony Hsieh died without a will. The problem was he left thousands of sticky notes detailing potential business deals and financial commitments.
It will take years before his estate is settled because it will take time to value his estate. That’s the importance of estate planning as it can help determine the full value of your estate.
One of the tasks of the estate executor is to locate and protect your assets. Without an estate plan, this can be a difficult and time-consuming task. By ensuring you have an estate plan, you can rest assured that your loved ones will not spend years in probate court trying to value your assets.
Pay Bills and Taxes
Another task that an estate executor needs to complete is to pay all the creditors and the taxes. This task is just as complicated as you imagine. Ideally, you will have an estate plan that sets out all the creditors and the total taxes payable, and the tax authorities will not dispute.
Unfortunately, probate is something not that simple. Michael Jackson’s estate took four years to go through the probate court system. The court had to consider what Michael Jackson’s image was worth when he died so that they could determine how much taxes the estate owed.
The tax authorities valued Michael Jackson’s image at $434 million, whereas the estate said that it was only worth $2,000 at the time he died. After four years and a 250-page judgment, the court found that Michael Jackson’s image at the time of his death was worth $4.15 million.
What are the Qualities of the Perfect Estate Executor?
Now that you know what the obligations of an estate executor are, you are probably starting to get an understanding of what qualities they need. Your friend who hates paperwork and numbers is probably not going to be the best choice for an estate executor. Also, that family member you cut out of the will is probably not going to be an impartial estate executor.
Your estate executor should be trustworthy. You are placing a lot of trust in this person to take care of your wishes once you pass away. They need to follow your instructions and fulfill their obligations without getting distracted or emotional.
A large part of the role of the estate executor is completing paperwork and meeting deadlines. It will help if your estate executor is someone who is organized. They will need to locate assets, manage creditors, and speak to lawyers, advisors, accountants, and other professionals.
Having organizational capabilities can make the whole process simpler. Even something as simple as getting a copy of a death certificate can take the estate executor a long time. It might involve phone calls, repeated requests, and bureaucratic hoops to jump.
Committed to Work
Your estate executor should be committed to work. The work of an estate executor is not always simple. The more complex the estate, the more work is involved.
Your estate executor should understand what is required of them. You should ensure that their expectations are managed so they are not surprised at the work involved. Before they commit to the role, make sure they know what they are committing to.
Impartial or Objective
The estate executor should be impartial or objective. If your estate executor has some financial or personal reasons, they can get swayed and create more issues. It can further delay the probate process.
Make sure you choose someone who is impartial and can remain objective. Once there is money on the line, objectivity can disappear. Take extra care to find someone who does not have anything personal on the line.
In a situation where you cannot find someone impartial, consider a third-party corporate executor. By choosing someone unrelated, you can rest assured that your estate executor will perform their duties without any issues.
Another consideration when choosing an estate executive is their location. While it’s possible to do a lot of tasks online now, there are some court procedures that need to be done in person.
If you have someone who doesn’t live in Georgia, you can end up creating more issues for them. For example, something as simple as getting a document notarized for the court process can become a long and arduous process if you are not in the country.
Also, estate rules differ in different states and countries. If your estate executor doesn’t understand the basic estate rules, they can get frustrated and overwhelmed by the process. Choosing someone who lives in Georgia could make things easier for your estate executor.
Finding someone with a flexible schedule may not always be easy. What you need to consider is finding someone who has the time and capacity to take on the role of an estate executor. The CEO of a multi-billion-dollar company who is constantly flying out of the country will not be able to dedicate the time necessary to complete their obligations.
Many times, the executor of the estate will need to have phone calls with the court and professionals who are only available during business hours. If their schedule doesn’t allow for this flexibility, they could miss a lot of deadlines and cost your estate a significant amount of money.
Age and Health
Keep the age and health of the estate executor in mind. Someone who has medical conditions to worry about will not be able to take on the role of the estate executor. You may even end up in a situation where they are not mentally capable of performing their duties at the time of your death.
To assist with this situation, consider choosing alternative estate executors who can take on the role if your original executor is mentally or physically unable to perform his or her duties.
Should I Choose a Corporate Estate Executor?
If your estate is complex, you may want to choose a corporate estate executor. Choosing a non-professional executor can negatively impact the finances of your estate and beneficiaries. Missing deadlines and making mistakes can lead to penalties that the estate must pay.
Finding someone impartial without a financial stake in the estate can also be difficult. Rather than taking someone out of your will, you may want to get an unbiased third-party estate executor.
A good way to find balance is to choose both a professional executor and a family member. In this way, you know that your interests are being taken care of by someone who knows you. You also know that your loved ones won’t be unduly burdened because there is a professional executor who has the expertise to take care of the estate obligations.
If there is antagonism in the family and you know it could result in disputes, you should consider a corporate executor. Rather than creating conditions for disputes, you can take the best steps to ensure that you have someone neutral dealing with the estate.
Book a Consultation to Find Your Perfect Estate Executor
An estate executor has an important role in distributing your assets upon your death. Not everyone can fit into the role of an estate executor, and not everyone will want to take on that role because of the work involved. If your estate is large or complex, you may have to consider getting a corporate estate executor to relieve your family of the obligations of an estate executor.
Book a consultation with us today. We can walk you through the probate process, help you resolve disputes, and ensure that all creditor claims are handled correctly. We can help you ensure that your family legacy is taken care of without any stress on your loved ones.