Estate planning should include careful consideration of the person you select to execute the wishes in your will. Effective probate and estate administration can depend on the person you select as executor for your estate.
An estate is everything that a person owns when they die such as financial accounts, real estate, and personal possessions. An estate plan helps assure that your wishes are carried out after you die and provide guidance for end-of-life considerations.
On average, it takes almost 16 months to settle an estate. Estates worth less than $10,000 usually take 11 months to settle. Estates worth more than $5 million typically take 42 months which is the longest time
A court will decide how assets are distributed if a person dies intestate or without a will. This process is public and may be difficult if would-be heirs disagree on who should inherit the estate. Courts may also select the children’s guardian if there is no will or other instructions.
Selecting an executor
An executor has important responsibilities. These include filing the will with the court, paying off the decedent’s debts, closing accounts and assuring remaining property is distributed according to the will. Some assets such as retirement accounts and life insurance, however, are distributed to the named account beneficiaries.
Executors should be well-organized, competent, and trustworthy. They need to balance the time needed to serve as an executor with their jobs and personal lives. Executors typically receive a fee depending on the estate size set by state law.
Co-executors must share these duties and get along. Obtaining two executor signatures and their agreement on issues makes the process more cumbersome.
Before selecting an executor, discuss your expectations and their responsibilities with them. Name a contingency executor, after discussing their duties, in case the situation changes. It is also important for married couples who name each other as executors to select a contingency executor.
The same considerations apply to selection of a trustee for an estate. Trustees assume important duties on governing trust and asset distribution its assets.
A trust department at a bank, a trust company, an accountant, or attorney can serve as an executor or trustee if you cannot find a family member or friend to assume these duties.
Your estate plan should be reviewed every three to five years, according to experts. Major life changes such as a divorce, birth, or major acquisition also requires another review of estate plans. Periodically consider whether your executor or trustee can still fulfill their duties.
Selecting agents for financial and health care powers of attorneys also require careful consideration. Attorneys can assist you with these decisions and drafting appropriate documents.