The Executor Decision

Recently, someone I care about named me as an executor on their will. This is something of a new experience for me, so I naturally spent some time reading up on what’s required of an executor in that state as well as trying to understand what exactly they wanted to happen with their assets (which aren’t tremendous).

What does an executor do? What typically happens is that, when you’re named as an executor on a will, you’re put in charge of handling the business of the estate when that person dies. The will is submitted in probate court, the judge checks who the executor is, and then the judge signs an Executor Letter of Appointment which allows the executor to execute any and all business that needs to be done by the estate. This is usually quick and is done pretty quickly after the passing of the person involved.

An executor’s job is threefold: you have to secure the assets of the deceased (mostly, just make sure you know where the valuable items are and that they’re secure), determine who the legal heirs are, and pay any outstanding debts of the deceased. The second part of that – determining who the legal heirs are and what they’re entitled to – is the part that can be tricky, and it’s the part for which you may want to have a lawyer of your own.

There’s also the matter of an executor’s fee, which is an amount that’s paid to the executor out of the estate for the work they’re doing. This amount is usually set by the judge and is heavily guided by statute (usually ending up somewhere near 3% of the estate). The executor can waive this if they wish.

This left me with a few concerns.

First, it’s good for both the person and their executor to have a clearly-stated will. This is why it’s often good to have a lawyer involved in the writing of the will. You want as little ambiguity as possible, because greedy people will root out that ambiguity and possibly pursue legal action to manipulate that ambiguity to their favor. One method is to explicitly name people in the will. Another method is to proportionately share the estate among a certain closed set of people, such as your children.

Second, the person and the executor need to trust each other and the person knows that the executor is reliable. An executor who really does not have the best interests of the deceased in mind often has at least some power to manipulate the estate.

I am quite sure the person who wished me to be executor trusts me – in fact, that’s the primary reason this person chose me to be executor, according to their own words.

It’s the flip side of this coin that is on my mind. Who will I choose as my executor? Obviously, my wife handles it in a situation where just one of us passes, but our will is a joint one. Who should be that executor?

It must be someone I trust and someone that I can rely on. I’ve been working on such a list for a while and weeding people off of it for various reasons. (We do have a “temporary” executor in place, but we’d like to eventually have someone else for age-related reasons.)

For me, such decisions aren’t easy ones. If Sarah and I were to pass on at the same time, I’d want someone to handle our estate with the best interests of our children in mind.

Why does this concern me so much? I’ve witnessed disastrous situations resulting from unclear wills and greedy executors and heirs, both from readers and in my own life. A very clear will and a strong executor can go a long way toward heading off such issues. Again, a big reason why I care so much about this is because I have young children who will rely to some degree on what’s stated in that document and how the executor behaves.

It’s one of those decisions that I must get right.

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  1. Brittany says:

    Interesting thoughts. I was recently named both executor of the estate and of the trust (set up to hold my minor siblings’ portion of the small estate (mostly house and life insurance money, in the worse case). While it’s nice to have perceptions of my financial acumen validated, it’s also not a responsibility I’d take lightly.

  2. lurker carl says:

    Tis better to put your assets into a trust.

  3. valleycat1 says:

    Anyone, regardless of age, with any assets and/or dependents, needs to have a will in place. I agree with lurker carl that you should also set up a trust for the assets to go into. In Texas, all that requires is to name the trust in your will. Then you can avoid an extended probate period.

    As an executor, you need to know where all the paperwork is for accounts & major assets (or where they’ve stored a list of pertinent information), name/contact info for the attorney, as well as a copy of the will naming you executor.

  4. Bellen says:

    With young children, their guardian is of utmost importance in the event of both of you passing. With that in mind, it is often not the best idea to have the same person/persons be both guardian and executor. We were advised to by several people who had gone thru the process to seriously consider having an attorney be the executor of our will until the children reached majority – that way there would be no question as to how monies from the estate would be distributed. This was mainly so education and medical bills would be paid promptly and the money would be there.

    Now as my husband and I enter the last decades of our lives, we are both mid 60s, we have chosen an executor, our youngest son, as he lives the closest to us in FL as the other 2 live in NE. Being an executor of a will long distance is very difficult at best – my sister in CT used a lawyer here in FL for my father’s will and he was frequently unavailable, didn’t follow thru, etc mainly because she was unable to be there in person.

  5. Sassy says:

    We chose a couple of different folks to be alternative executors — and separate from the guardians we named. We wanted the guardians to be able to focus on the kids and someone we trusted to actually get all the paperwork done while still working with the guardians to take care of the people.

  6. Carrie says:

    My parents named me (3rd of 4 children) executor of their estate when I was about 21. My younger brother was a minor then. I remember discussing with them why they chose me, and what their intents for the estate were. They have made the decision to put their entire estate into trust, and named me a successor trustee and signor all all accounts, after having dealt with various elderly family members and the trouble a will can cause.

    Now we are 10+ years down the road, and their plans for their estate are changing. I am still the executor, but as discussions evolve, I sense that even when the other heirs are made aware of their plans (long before they will be implemented) there will be some unhappy people. I know the challenge will be to stay true to the intent my parents express, while trying to work for common ground with the other heirs in the event of my parents passing. It is not a task I look forward to, but I am glad that my parents have been thoughtfully planning for years.

    On the other hand, my husband and I have not been planning very well for our minor children in the event of our passing, and even though I see the reasons for ensuring our children would be well cared for and our assets would be guarded for their use, we just haven’t gotten around to doing anything about it.

    Thanks for the friendly reminder, Trent!

  7. Kathryn says:

    This is such an important issue. I learned firsthand how critical it is to pick a good executor (or trustee, if you have a trust). One of my relatives left behind a perfectly executed trust, but it was a nightmare to settle because he had picked a bad trustee.
    This trustee was psychologically unable to face the idea of my relative’s death, so he refused to discuss the trust, funeral arrangements, etc. before my relative’s death; afterwards, the trustee was so paralyzed by grief (and his ignorance about the trust and my relative’s wishes) that he was unable to act efficiently or objectively to fulfill the directives of the trust. He was also ignorant of basic financial, business, and legal matters, which further delayed settlement of the estate and caused it to lose significant money in the process.
    All this has prompted me and my husband to decide that we will choose an executor who is not a close relative, who has a solid financial/business track record, and who has no hangups about discussing our deaths and related issues.

  8. This is such a great topic. Too many people don’t consider how important this is and how it is an act of love toward your family to be very clear about these things. We purposely chose an executor that is not the same person as who we chose as guardians for our children. We also make a point to review both choices every few years in case we feel we need to make changes to either case which is also something people should consider doing. Thanks for bringing up an important subject!

  9. Love this article!

    I help lots of people that got named as executor. They come to my office and say…”Now what do I do?” It’s a big job!

  10. Vanessa says:

    @valleycat: “Anyone, regardless of age, with any assets and/or dependents, needs to have a will in place.”

    If you don’t have dependents, you only need a will if you care what happens to your stuff after you die. I can’t think of a good reason to care, so I don’t have a will.

  11. valleycat1 says:

    #10 – even if you don’t care, your parents or siblings will have to deal with the hassles of probate, including legal fees, so you might want to clue them in.

  12. We ended up ensuring that the executor is not the same couple that will be getting our children in the event of our death. This way, this alleviates any concerns over how the money is handled and ensures the money is accounted for by a third party that doesn’t stand to benefit at all. Obviously, you have to trust the people you’re leaving your children with… but checks and balances go a long way. Best friends and family members steal from each other all the time. Don’t think for a moment that there would never be a temptation to use a few bucks here and a few bucks there for things unrelated to your childrens’ upbringing!

  13. AndreaS says:

    The most important thing to keep in mind is that an executor is bound by “fiduciary” duty. Just as those with power of attorney looked after the needs and assets of someone who has been incapacitated, an executor has been asked to implement the wishes of a deceased individual. This is a basic principle of that law that goes back over 1000 years.
    The role of fiduciary is a sacred and selfless role. You are bound by law to serve the interestsd of others, including other heirs. As an executor, you are strictly prohibited from acting in a manner that benefits you over the heirs.
    When my grandmother’s household was broken up, the executor was my uncle. Prior to her death he had power of attorney. My grandmother’s will did not specify certain items to various heirs, but only specified that the value be divided equally among the families of her children. The value included about $60,000 in antiques and an equal amount in cash. So when it came to dividing who got what items, my uncle felt that being executor meant that he got to first pick what he wanted to keep and then he got to decide what items others were allowed to keep. This was a clear violation of his fiduciary duty. We might have let this go, except that prior to my grandmother’s death he transferred her money into a joint survivorship account, and then after her death he claimed it by rights of survivorship. He maintained this was perfectly legal. Long story short, we went to court, and the majority of the value of the estate went to lawyers. (It came down to a choice between letting my uncle have the majority of the estate, or letting lawyers have it.) We won every legal hurdle, but it was extremely costly.
    If you want to talk about ideas that really save huge amounts of money, be sure that the person who has power of attorney and role of executor understands what it means to be a fiduciary. It is ILLEGAL for a fiduciary to act selfishly. Unless extremely blatant, it is usually handled as a civil rather than criminal process. But the resolution can take years and be extremely expensive.

  14. deRuiter says:

    “…..but our will is a joint one.” What is a joint will? Do you both have to die for it to go into effect? Are “joint wills” common in the Midwest?

  15. getagrip says:

    On the one hand you want someone you can trust. On the other, no matter what the executor does, someone won’t be happy, and likely no one will. Often the people who are the most vocal aren’t the deceased person’s adult children, rather those children’s spouses who seem the most like vultures fighting over the kill as they egg their spouse on to demand more, claim they were promised something, or complain about unfairness.

    I’m thinking I will want a lawyer outside the family. Mainly because if they’re likely to get angry, at least it’s at a neutral third party more so than at each other. One more thing I need to revisit.

  16. socalgal says:

    I am currently executor of a relative’s large estate. My Aunts & Uncles are the primary beneficiaries and I received some property & a small fee for handling everything. I was with my relative for years handling his day to day affairs, medication, etc. Many of the family members who received six figures had not seen this generous relative in years (or even decades) yet I have been the goat in the drama. The heirs want me to give up the small fee for administering the estate, and are very upset that I received the small home from my uncle (which was badly neglected). One of my relative’s recently sent a letter to all involved stating that I was now officially out of the family, while thanking me at the same time for handling the disbursement of the estate so quickly. So, before you agree to become an executor, I would urge you to really think about what the consequences could be when dealing with greed, family & money.

  17. Roberta says:

    Trent – you mentioned your will that you are working on narrowing down the list of potential executors, but you did not refer to a guardian for your three children (possibly because this column was on executorship). If you (and every other parent out there reading this) haven’t done so already, please make sure you have someone in place who would be willing to raise them if you and your spouse were so unfortunate as to pass away at the same time (even more critical if you are a single parent, by the way). I was an adult before I learned that my parents (of five children!) had had neither wills nor guardianship in place during all the years we were growing up. A lawyer told us that the courts could quite easily have split the five of us between our mother’s sister and her husband, and our father’s sister and her husband, as the closest family members. Not only were these aunts and uncles in two different states, they had completely different economic situations, religions and approaches to child rearing. I shudder at the thought of either of those families raising any of us. None of them were particularly good parents, and all of their children have had very unhappy and difficult lives.
    When our first child was born, my husband and I asked my youngest sister if she was willing to take on guardianship if necessary. We discussed this thoroughly with her beforehand, and we already knew that she shared our educational, religous and financial goals for our children. She agreed to take it on, and we maintained massive amounts of life insurance so that she would be able to buy a larger house and pay for college etc. As each of our subsequent three children came along, we offered her the oppportunity to end this potential responsibility, which each time she graciously declined to do.(She even told her future husband as their relationship became serious about her acceptance of my children as hers to raise if necessary.) Once our oldest child turned 21, we named him as guardian of his siblings. We are comfortable with this arrangement, as are our children.

    I would also second the comments about heirs sometimes squabbling over estates. Many negative feelings come out after a death and old arguments and differences can be very ugly indeed. I’ve seen it happen in my own family (Mom always promised me that chair! You were never here to help when Dad needed it!) and it is very distressing. We had friends who invited their grown children over one weekend, and walked through the entire house with a notebook, and settled then and there who got what, which dissipated a lot of potential resentment. They also told us how funny it was that some of their “treasures” didn’t appeal to any of their kids, but they all wanted other items which she thought nobody would want.

    Either way, handling someone else’s last wishes is not something to be taken lightly.

  18. slccom says:

    #10, Valleycat, if you die in an event that leaves your estate a large amount of money, wouldn’t you be interested in where it goes? Don’t you have any causes you would like to have some money? Do you have any family members you don’t want to have one red cent? Do you have any friends who could use some help?

    And the point about what happens when you die intestate is well taken! It is an awful mess for those whom you supposedly loved.

  19. First Step says:

    If you live in a different state than the person who named you executor, check the rules for the other state. My husband and I live in NC, and our parents live in VA. In VA, our parents have to appoint an in-state representative along with naming us as executors.

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