With heaps of confusing paperwork, fine print, and intense emotions surrounding the will-writing process, it’s no surprise that 67% of Americans don’t have an estate plan. 

However, putting off these vital estate decisions can cause severe problems in the long run, both for you and your loved ones. 

Your estate consists of everything you own: car, home, family business, savings accounts, etc. 

The idea behind estate planning and executor selection is to take proactive steps now, making it easier to carry out your wishes after you’re gone. 

If something happens to you before you’ve written out your will, the state courts take charge and decide who gets your assets. Instead of letting the courts control the future of your estate, select your estate executor ahead of time. Unsure of whom to name as your executor? 

Here are some expert tips to help you make an informed decision. 

What Is an Executor? 

An executor, also known as a personal representative, is the administrator of a deceased person’s last will and testament. 

They are responsible for managing the individual’s estate, dealing with probate courts, paying outstanding taxes or debts, collecting assets, and dispersing allotments to designated beneficiaries. 

Individuals can appoint an executor in their will. However, a court will appoint an executor if no representative is designated in the will. 

What Are Executors Responsible For? 

Keep in mind that executor duties can vary by state and the needs of your estate plan. 

Generally, executors are responsible for all of the following.

Managing Your Accounts 

Your executor must notify your bank, credit card companies, utilities, loan lenders, and any government agencies (SSA) of your passing. 

They are also authorized to open an estate account (a temporary bank account that holds your estate’s money) to help manage finances in accordance with your will. 

Keeping Of the Will 

Executors must locate your will, determine what kind of probate is necessary, and, if needed (in most cases), file the will with the appropriate probate court. 

Taxes and Debts

Personal representatives can file tax returns and pay your estate’s taxes and debts (if needed). 

For example, they can establish annual gifting to qualified charitable and non-profit organizations to reduce taxable estate.

Asset Maintenance and Distribution 

Your personal representative is responsible for locating and maintaining a record of your assets as well as distributing your assets to your beneficiaries according to your will.

Assets can include bank accounts, investments, real estate, jewelry, a business, furniture, vehicles, computers, smartphones, etc.

Overseeing Beneficiaries

Executors are in charge of locating and reaching out to your beneficiaries. They may also help in creating/updating beneficiaries on plans such as life insurance, IRAs, and 401(k)s and limiting estate taxes by setting up trust accounts in the name of beneficiaries.

 

If you have living dependents, your personal representative may also establish their new guardianship. 

Court Representation 

Personal representatives are required to represent you and your estate in probate court. 

Executor Fast Facts

Want to know more about an executor’s functions? Here are a few fast facts about their responsibilities: 

• In addition to their more established duties, your executor may also have to function as a peacekeeper or maker in the execution of your estate plan — especially when it comes to dispersing assets to beneficiaries according to the will. 
• Your executor has to be approved by a court.
• An executor can override a beneficiary if they act in the best interest of the deceased wishes (will), and it is outlined in the will.
• An executor can hire an accountant or lawyer if needed. 

Why Do I Need an Executor?

Most financial advisors recommend appointing an executor to ensure your estate wishes are correctly carried out. 

Suppose you don’t identify an executor in your will. In that case, you are essentially leaving your assets up to the court — which may not consider your wishes when sorting through your estate. 

Ultimately, it is always in your best interest to choose someone.

What Makes a Good Executor? 

It’s essential to thoroughly review all of your options when it comes to appointing an executor.

This person will represent you and manage your entire estate — it’s a big decision! 

How to Select Your Executor 

Many prefer to pick a close family member, such as a spouse, child, parent, or sibling. However, you are not limited to relatives — you can choose anyone! 

For example, you can also have a friend, lawyer, other professional, or trustee company act as your executor. 

A professional may be your best choice of executor if you have the following:

• No family members living close by
• Family members with special needs 
• A blended/non-traditional family
• Complex assets
• Assets or beneficiaries located outside of the country

Ultimately, choosing someone trustworthy, honest, and good at forming and keeping relationships with others is most important. 

Here are some essential traits to look for: 

• Maturity — The person must be mature enough to handle the responsibilities physically and mentally. In most states, age and other restrictions exist on who can serve as an executor. 
• Organization — Your executor will create lists of your bank accounts and any personal assets. Choosing an organized and detail-oriented representative will help streamline this process. 
• Availability — The person must have the time and availability to handle the responsibilities. This includes potentially living close to you and being available for months (sometimes years), depending on how long it takes to sort through your estate plan. 
• Trustworthiness — Most notably, choosing someone you trust can give you peace of mind in knowing that your wishes and legacy will be carried out as you intend. 

How to Carry Out Your Selection 

Now that you’ve decided who should be your executor, it’s time to take action. 

Decide on Executor Compensation 

Executor positions require a large time and work commitment. As such, it makes sense to provide them with payment (this can be included in your will). 

Compensation methods can vary greatly depending on your estate, the executor’s preferences, and state laws. 

Create a Backup Plan

Know that the person you pick might need to learn what being an executor entails, and make sure to give them time to consider the decision. 

If the person isn’t a good fit, or they decide they’re not comfortable with the responsibility, have a backup plan/person in mind. Even if your first choice accepts, it’s worth naming a contingent executor if the situation changes. 

Prepare Your Executor

Once your chosen executor accepts the position, it’s essential to make sure they’re prepared for this big responsibility ahead of time.  

In 2021, only 46% of will executors were aware of a will. 

Don’t leave your personal representative in a bad spot. Instead, provide them with all of your financial and estate details in advance, such as:

• Access/knowledge of where your original documents are located
• Names and contact details of your lawyers/financial planners
• List of assets and debts (including bank accounts, investment accounts, insurance policies, and real estate)

The more information you give your personal representative, the easier it will be for them to carry out your wishes later. 

Review Your Decision 

You should generally revisit your executor selection every 3 to 5 years. 

If you experience a significant life event such as a divorce/marriage, major asset acquisition, or death of a family member, you may want to review your selection even sooner. In essence, you want to make sure that the person you named still makes sense. 

Reach Out for Additional Support 

Unsure who to appoint as your executor? Worried about potentially damaging familial relationships through your decision? Intimidated by the confusing paperwork and changing rules? 

Our financial advisors at Goepper Burkhardt Wealth Management are here to help. With years of experience in executor planning, we have the knowledge and expertise to guide you through the decision process, help you inform your family, and clear up any doubts surrounding the future of your estate. 

Get in touch with a member of our team to get started.