Planning Your Estate? What to Ask Before You Name an Executor

Mon, Jun 5th, 2023 | by Miles Mediation and Arbitration | Article | Social Share

Benjamin Franklin once said that nothing is certain except for death and taxes. For many people, the awareness of the first certainty spurs them to make an estate plan, which necessitates several important decisions. In addition to deciding how to distribute your assets and make sure those you love are cared for, you must name an executor.

Many people simply choose a close relative without fully considering the duties the executor must carry out, or whether the person is truly well-suited to the role. A more thorough understanding of the role an executor plays, however, can help you make the best choice, help ensure that your estate is managed the way you want, after you’re gone, and help minimize the chance of a conflict or problem arising down the road. Here’s a closer look at what to consider before you name an executor.

The Role of an Executor

The executor is the person who is either named in the will or appointed to administer the estate of the decedent. An executor’s duties include collecting the assets of the estate; determining the liabilities of the estate; determining the heirs or legatees; paying the liabilities off; and distributing the assets of the estate to the appropriate parties.

If the executor fails to carry out these duties, or fails to perform them diligently, that person can be liable to creditors or heirs who are harmed due to those actions (or inactions). In some cases, an executor can also be personally liable if he or she signs paperwork in a personal capacity, as opposed to in the role of executor.

How to Choose an Executor

So how do you choose an executor? Start by considering the complexity of your estate, and the abilities of the people you’re considering. You shouldn’t name your oldest child simply because she is the eldest, for example — unless you’re confident she can handle the responsibility and work involved.

Serving as an executor takes a lot of time. The executor must gather information from banks, investment companies, life insurance companies, and creditors. He or she may also have to go through the contents of someone’s home and determine how to dispose of the contents, while honoring the wishes of the decedent. The executor must pay for funeral expenses, notify creditors, pay off creditors, publish death notifications, and file estate tax returns. It can take hundreds of hours to settle an estate — according to EstateExec.com, the average is 570 hours, and the more complex the estate, the more time may be involved.

As an attorney and mediator who handles estate-related issues, I would not choose anyone who has demonstrated someone who cannot handle his or her finances properly; who has criminal convictions (particularly having to do with financial impropriety); or anyone who is not financially “stable.” You should choose someone who understands the work that being an executor entails; that the estate must be approved by the judge or clerk of the court; that there are deadlines that must be met, such as filing the preliminary inventory; and that there’s a process you must follow.

The Executor’s Fiduciary Duty

The executor has a fiduciary duty and certain actions or inactions, whether done intentionally or unintentionally, can lead to liability, including:

Failing to pay taxes owed by the estate;
Distributing to beneficiaries too early;
Failing to pay creditors, or failing to pay creditors properly based on their class;
Distributing the estate improperly; and
Outright embezzlement of estate money/property.

I’ve seen several situations where the executor distributed too much to the wrong people or failed to distribute the estate properly. Depending on the complexity of the estate, the executor may want to consider hiring an attorney to help administer the estate; in most cases, the attorney’s fees can be paid by the estate. He or she may also want to consider executor liability insurance; again, most courts will allow the premium to be paid by the estate.

The executor should also track the amount of time it takes to administer the estate; the will may specify that the executor be paid a specific amount of money, or the court may allow the executor to take a percentage of the value of the estate.

Other Factors to Consider

Finally, if you’re planning your estate, look for ways to reduce the conflict that may occur after you die. Particularly if you have a blended family, or children from more than one relationship, you’re better off anticipating problems, and talking about them ahead of time. You might say, “here are the types of things I’m concerned about, and here’s how I’d like things to go.” Invariably there will be conflict, but talking to your loved ones about your wishes ahead of time can help minimize it.

If you’re an attorney, remember that you are also a counselor at law. When you have folks come in, lay these issues out and be as frank as you can be. Talk with the client about the choice of an executor and make yourself available to talk to the beneficiaries as well. Being transparent and communicating your client’s wishes ahead of time can help protect the executor from conflict as he or she undertakes the responsibility of carrying out the testator’s wishes.

About James Young

James Young is a fully bilingual (English-Spanish) mediator and arbitrator who also maintains an active law practice. He is a North Carolina Certified Superior Court Mediator and has experience mediating a range of cases including, but not limited to, guardianships and Medicaid planning, special needs estate planning, breach of contract, defamation, personal injury, workers compensation, and estate matters. James also has extensive arbitration experience in the areas of personal injury, landlord/tenant issues, and contractual disputes.