It’s hard because you want to be sure your chosen person understands your wishes, your financial situation and can make good decisions on your behalf. Not everyone can do that.
There is considerable responsibility that comes with being named an executor of an estate, explains MoneySense in the article “Should the sole recipient of an estate be the executor too?” There have been new rules passed in the last year that make the tax reporting even more important. What happens if you realize that the person you originally named may not be up to the task? This is another reason why it’s good to review estate plans every few years. There are several factors to consider when you think about whom you might name.
Consider the person’s age. It’s smart to choose a person who’s younger than you. Although that doesn’t guarantee that they will outlive you, it certainly ups the odds. Ideally, you should try to find a person who is comfortable with the areas of money and tax and doesn’t easily get overwhelmed by paperwork. Since the role of estate executor can be an intense issue that takes a great amount of time, the person you choose ideally will be retired or have the bandwidth to dedicate the substantial time commitment required to do the job properly.
Based on the complexity of the assets in the estate—and the amount of planning the deceased has done to make the job a little bit easier—the winding up of an estate can take more than a year. If the assets must be probated, you’ll want the person you appoint to understand the process and liability that she’s accepting. There are multiple tax returns and filings that must be completed and filed at specific times.
There are banks that offer trust services, but these can be expensive and will take a chunk out of the estate in fees, until the last tax filing is completed. An attorney is also a good choice, but not many lawyers will take on the liability and have the time to act as an executor.
Many people ask a family member who’s either performed these duties in the past or is willing and knowledgeable enough to do things in a conscientious manner and follow through. Remember, the more estate planning that’s done in advance, the easier it makes it for an executor.
Another option is to have two or more adult children act as an executor. However, this can add some complexity to the process because first they must both agree on every issue; second, they must both be available to make decisions and sign documents at the same time. These days you can have siblings living from Maine to Oregon, and people can travel all over the world at any time.
Talk with the person you are considering naming an executor. Don’t just put their name down and hope for the best. They will need to understand the both the tasks and your wishes. Don’t hesitate to ask your estate planning executor their opinion about your choices; they’ve seen many situations and share useful insights.
Reference: MoneySense (March 27, 2019) “Should the sole recipient of an estate be the executor too?”