Has a parent or senior loved one asked to appoint you as executor of his or her estate? If so, you’re probably honored to be chosen for the trusted role. But do you really know what you’re taking on?
“Being named the executor of a loved one’s estate is a role that entails tremendous legal responsibility and trust,” says Olga P. Okaty, CFP®, director of financial planning at Centerpoint Advisors, an independent wealth management firm in Needham, Massachusetts. “Understanding your obligations well in advance is essential to being able to perform your future duties effectively while still coping with the loss when, inevitably, the time comes.”
The executor must perform time-consuming administrative tasks, usually while grieving and maybe even working a full-time job.
He or she must also navigate sibling rivalries or shoulder the wrath of spurned heirs at the same time.
If you’re considering acting as executor of a parent or senior loved one’s estate, here’s what you need to know before making your decision:
The executor, also known as the “personal representative” in some states, settles the estate of the decedent, or “testator,” according to the terms of the will and probate laws, which vary from state-to-state.
The executor role can be “highly emotional,” says Okaty. At the same time, the numerous administrative tasks may be unfamiliar to the executor if he or she has never settled an estate. For this reason, the American Bar Association (ABA) recommends that an executor hire an attorney who specializes in estates and trusts to advise and assist with duties. Depending on the complexity of the estate and state laws, the probate process can take from several months to a few years.
The executor must honor the testator’s directives, even if those instructions are to the detriment of some family members or organizations over others, says Randall Saxton, an estate planning attorney with Saxton Law in Madison, Mississippi.
“The executor must act in the best interest of everyone who has a monetary interest in the estate, such as beneficiaries, creditors and heirs at law,” says Saxton. “You hold the decedent’s assets for their benefit and not looking out for your interests alone.”
Before you accept the executor role, make sure you know the extent of your duties, along with your parent or senior loved one’s directives, financial situation and relationships with family members and other parties with an interest in the estate.
Those parties could include charities, creditors or other individuals or organizations that the decedent may have supported and to whom a bequest may have been made, says Okaty.
Overall, the executor or personal representative is responsible for the following duties:
Okaty recommends meeting with the testator to clarify any ambiguities, such as plans for complex assets like a family business, a family vacation home or heirlooms such as artwork, jewelry and musical instruments. Make sure the original copy of the will is accessible and safe. Also, find out whether family members have been notified about the testator’s decisions in the will.
“This will help you better anticipate future conversations and reactions and be better prepared to navigate any potential conflicts or disappointments,” says Okaty.
For more information on the duties of an executor, visit the American Bar Association’s “Guidelines for Individual Executors and Trustees.”
For information on the probate process, see “How Probate Works: A State Comparison.”
Have you had executor responsibilities? What other things should families know before taking on the executor role? We’d like to hear your tips in the comments below.