Don’t delay finalizing your estate plan, because determining who to name as you executor is difficult. Here’s some help to figure out how to make this important decision.
If there are no family members or friends with the necessary skills, your best option may be to name your attorney as the third-party executor of your will. A useful article from nj.com, “Who should be executor of your will?” explains how this works.
An executor is a person you name in your will or who is appointed by the court and is given the legal responsibility to address a deceased person's remaining financial obligations. An executor is responsible for paying debts and creditors, filing tax returns, paying taxes, and distributing the estate's assets, pursuant to the deceased person's wishes as stated in the will.
The individual named as an executor in a will can refuse to accept this task. A person who originally accepted the role as executor may resign at any point in time. Therefore, it’s a good idea to name alternative executors. If you don’t, a judge will appoint a replacement executor, if your original selection says no for any reason.
Most executors typically perform their duties without payment, but they are entitled to some renumeration. The reason that most executors don't ask for compensation, is because most executors are close family members and perform their duties out of respect for their deceased loved one. The amount an executor gets paid, is usually set by state law and what a probate court decides is reasonable under the circumstances.
For larger estates, it may be wise to select a professional, such as an attorney, who is familiar with the duties and obligations of serving as an executor. This can be extremely useful, when the deceased was the owner of a business and the estate may be complicated.
Executors will frequently engage attorneys to assist them. For example, in New Jersey, an attorney may serve and get paid as an executor and may be paid an additional fee for legal work performed by that attorney.
New Jersey law says that executors can receive 5% on the first $200,000 of the trust principal, 3.5% on the excess over $200,000 up to $1 million, and 2% on the excess over $1 million.
The executor is also entitled to receive six percent on all income received by the executor. While family members often waive their rights to take statutory commissions, they are within their rights to do so.
Reference: nj.com (April 16, 2018) “Who should be executor of your will?”