There are many decisions to make when you are setting up an estate plan. One of the most important decisions is who to choose as your estate executor.
What is an executor?
An executor is a person who manages and administers your estate after you pass away. It is a role that involves many roles, responsibilities and deadlines.
Along with locating your assets, your executor is responsible for distributing them to heirs and beneficiaries as outlined in your will, paying off any debts and filing a final tax return. If you are a business owner, an executor can also handle legal and tax-related issues for your business.
Given the many obligations of an executor, you should choose someone who is organized, responsible and you trust to handle these tasks. It is natural to want to name a close relative or friend who will respect your wishes and their roles seriously.
As you decide who to select, keep these considerations in mind.
Serving as an executor requires a major time commitment
The estate administration process can take several months to complete and each step typically involves copious amounts of paperwork. An executor must track down heirs and creditors, as well as communicate with hospitals, insurance companies and other entities.
An executor should have the capacity to deal with conflicts if they arise. Issues between heirs or with creditors sometimes happen during the estate administration process and an executor must be able to calmly and capably resolve these types of situations.
Organization and the ability to multi-task are important traits for an executor. They will be expected to review and organize large volumes of paperwork and take care of several tasks at once.
Good financial management skills are a desirable quality in an executor. An executor will be handling the financial details of your estate and financial competence makes this easier.
Additionally, this is why an executor you trust is important. Your executor will have access to your money and assets and you want to trust that they will distribute them according to the terms of your will, rather than taking it for themselves or hiding assets.
Who cannot serve as an executor?
When you decide who you would like as your executor, verify that they meet the legal requirements to serve as an executor. Texas law disqualifies certain people from serving as an executor, such as people with a felony conviction and out-of-state residents.
Incapacity will disqualify someone as an executor. Courts also generally retain the power to remove an executor if they are found to be unsuitable for various reasons, such as not performing their duties or squandering the estate’s assets.
If you do not have someone in your personal life you would like to choose as an executor, you can appoint a corporate executor. The benefit of a corporate executor is they are a neutral third party.
Appointing a corporate executor may mean an additional fee but this might be worth it for the peace of mind you will have by knowing your estate is in trustworthy hands.