Naming an Executor: 4 Questions Your Clients Should Be Asking

Posted by Justin C. Duft, JD, CFP, MSFS, CLU, ChFC, CLTC

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May 26, 2015 at 10:00 AM

naming an executorIt's common for spouses to name each other as executor of their wills. Considering the spouse is likely the person most familiar with the decedent's finances, this makes a lot of sense. But the surviving spouse then needs to name a new executor, and that responsibility often falls to an adult child.

Given the complexity of naming an executor, both the parent and child need to understand what an executorship entails and plan ahead for those duties. At some point, you'll likely find yourself in a position to advise members of both generations on this important decision. To start the planning process, here are four questions your clients should be asking before naming an executor.

1) What Does an Executor Do?

In addition to distributing the assets of the deceased parent, the executor has a number of other responsibilities, including:

  • Paying debts and final expenses
  • Filing taxes
  • Protecting assets
  • Paying bills
  • Ordering death certificates

He or she is a fiduciary and can be held to that standard by the estate beneficiaries. Staying organized and diligent is critical, especially if family relationships are tenuous.

2) Who's the Best Person for the Job?

This question should be asked by both the parent and child, especially since family dynamics can play a large role in executorship decisions. Keep in mind that your clients may act out of a sense of obligation rather than in their own best interests:

  • To avoid hurt feelings, many parents are inclined to name multiple children as coexecutors. This may be appropriate in some situations, but it can easily result in confusion, delays, and cumbersome legal requirements.
  • A child may feel duty-bound to accept the role of executor, even if he or she isn't equipped to carry out the responsibilities.

The best way to approach the matter is through a candid family conversation. Let me use an example from my own life to illustrate this point:

When my mother was updating her will, she set up a time to meet with me and my brother. She went over the provisions, explained her wishes, provided the locations of important documents—and told us that she intended to name me as executor. At first, my brother was hurt and questioned why he wasn't included as coexecutor. We had a frank discussion about the process and the time-consuming aspects of the job. In the end, he understood that my financial planning background made me the better candidate—and he was actually thankful that so much thought went into the decision.

3) Where Is Everything?

One of the executor's main duties is carrying out the parent's final instructions for distributing property, according to the will. The executor should talk with the parent about the location of the will and the need to keep important documents in a safe place.

  • Storing documents in a centralized location may prevent confusion later, especially if the parent is suffering from cognitive issues.
  • Safe-deposit boxes to which the executor has access are commonly used for keeping wills, life insurance policies, and the like. (If the executor cannot locate the will, it may be worthwhile to check with the parent's attorney.)

Over the course of a lifetime, people's belongings tend to accumulate—from personal possessions (e.g., jewelry and furniture) to bank accounts, real estate, royalties, deeds, and so on. If the estate is large, the family should periodically take an inventory of assets. Without an updated inventory, the executor will need to identify all of the assets upon the parent's death. If the parent was disorganized, this can be a daunting task. It will require the executor to search through home offices and old mail for anything that could indicate ownership in an asset.

4) What's Next?

Of course, these are just some initial steps to consider. There's much more to the role of executor. The functions can range from simple to very complex, and each state has its own set of rules. For some clients, the role of executor will seem daunting. If the process becomes overwhelming for a client, he or she should consult a qualified attorney.

So, what's your role? It's all about the planning. Taking the appropriate steps to ensure that the process goes smoothly will pay tremendous dividends when the time comes to act. Clients should discuss the process openly with family members and put an action plan in place. By encouraging them to do the prep work ahead of time, you'll help save your clients from headaches down the road.

What other questions do your clients need to ask when naming an executor? What steps do you take to help them put a plan in place? Share your thoughts with us below.

Commonwealth Financial Network® does not provide legal or tax advice. You should consult a legal or tax professional regarding your individual situation.

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