Trust Planning

Trust Planning

Estate Planning and Wealth Management

How to Choose the Right Executor for Your Estate

summary from Deborah L. Jacobs The New York Times - Mar 2 2011

What does an estate executor do?

The executor, also known as a personal representative, is responsible for managing the estate of the deceased person. The estate executor remains in charge until everything in the will is legally taken care of—including probate, paying taxes, organizing and distributing assets, and possibly hiring an attorney and other experts.

How to choose an estate executor.

Choosing your executor should be done wisely. The estate executor's responsibilities are many, so the person you choose should demonstrate strong organizational and communication skills, as well as the ability to manage deadlines and paperwork.

Should you choose a family member as an executor or a professional as executor?

Giving a family member the title of executor can be an advantage. Because of the personal relationship, there is an understanding of the family's desires. However, be sure the chosen family member can carry out the executor's duties and manage the estate properly. You can also choose a close friend whom you can rely on. Sometimes choosing a family member can backfire; if you choose all of your children as co-executors there may be conflicts and indecision.

Alan Gassman of Bates & Associates in Florida, recommends to first choose a responsible family member as your estate executor. Then, if the needs of your estate planning require more professional attention, this family member may hire an expert to solve specific problems, or as a last resort, themselves interview a professional and negotiate fees.

How much does an executor or personal representative cost?

The cost of an executor or personal representative varies widely depending on your location. In Florida, executors can charge as much as 3% of the first million, regardless of how much work is required. Some states have limits, and others base the cost on your assets. Mr. Gassman points out that families can pay executors by the hour, which can save a lot of money in the end.

How to save money in your estate and avoid probate.

Probate is the formal process of satisfying the court that the will is valid, and then, with court supervision, administering the estate according to terms of the will. This usually involves a lawyer, and that, plus court fees, can make it quite expensive. This court supervision and expense can be bypassed or minimized. Reducing probate costs can be as simple as putting your vacation home in a revocable trust. Then executor fees become smaller as assets put into a revocable trust don't count towards the executor's fee. The lesser the value of your assets to probate, the better. Totally avoiding probate, by putting everything into a living trust, is even better. A family member acting as the estate executor will usually forgo fees.