Estate planning is the best way to protect the financial wellbeing of you and your family. But there are many factors that you need to consider when planning for the future of your assets and their distribution.
An executor plays a vital role in ensuring that your wishes are carried out. They can also help your family avoid many of the costs and issues that can arise when executing a will.
Choosing the right executor is a critical step in the estate planning process. Understanding the role of an executor and what can happen when you choose the wrong one lets you make the right choices for your future.
What Your Executor Does
Many people draft wills in order to protect and distribute their assets after their death. Choosing an executor allows you to select a qualified individual to manage your financial and personal affairs.
More importantly, an executor carries out the distributions according to your expressed wishes.
It’s the duty of the executor to begin the probate process by filing the appropriate paperwork as well as notifying all interested parties. This allows creditors and beneficiaries to make their claims against the estate.
Any errors related to these notifications can result in costly legal actions by those interested parties. So the executor must be sure to complete these and other actions correctly.
The executor must also provide an accurate account of your assets. This includes information related to property as well as bank and retirement accounts. Personal belongings must also be included in the inventory provided to the probate court.
Choosing the Right Executor
Taking the time to select the right executor ensures that your family and friends receive their inheritance as dictated by your will. Based on the requirements listed above, your choice of executor can affect a wide range of aspects related to you and your family’s future.
Although executors can hire third parties to assist in tax filings and other processes, the individual you choose must be competent and able to manage all of the requirements related to executing your will.
You can select a close friend or family member as your executor. But you can also hire a skilled professional such as an estate planning attorney to act as your executor.
The cost of hiring a professional executor may be covered by the estate and can be a valuable investment in protecting your assets.
The Wrong Executor
There are a number of issues that can arise when you choose the wrong executor for your estate. These include problems related to tax filings, will contests, and delays.
The wrong executor is that individual who lacks the knowledge or experience to fulfill the duties that are required. Knowledge in estate law, accounting, and investment management can increase the likelihood that you avoid these and other issues.
The wrong executor may be unable to address any disputes that arise between the beneficiaries of your estate. Conflicts between family members and friends are common, and the executor must be able to resolve these disputes to avoid costly legal actions.
The death of an individual can be emotionally challenging. Choosing a close family member as your executor may not be the best decision, as it may be too difficult for that person to fulfill their duties after your death.
Also, a person who isn’t willing to discuss your estate plans with you will also be the wrong executor. Individuals who aren’t interested or are uncomfortable with this discussion should not be chosen to serve as executors.
More importantly, your executor must be completely on board with your wishes. Any disagreements between you and your executor will likely result in issues at the time that your assets are distributed.
Choosing the right executor gives you peace of mind in knowing that your estate will be distributed according to your wishes. The wrong executor can cost you and your family time and money.
Knowing the importance of having the right executor is a fundamental step in establishing a solid estate plan for your future.