Choosing the right executor is critical to the smooth administration of your estate. The person you appoint for this role does not have to be a professional executor or someone with legal or financial expertise. In many instances, family members can effectively perform as the executor, hiring professionals, at the estate's expense, on an as-needed basis.
Appointing a loved one can, however, bring complications. For example, if your executor stands to gain from the will, he or she may have a conflict of interest, which can lead to contesting the will or other disputes by unhappy family members. If this is a concern, an independent outsider as your executor would be the right choice.When making your selection, keep in mind that an executor's responsibilities may include:
- Collecting, protecting and taking inventory of the estate's assets,
- Filing the estate's tax returns and paying its taxes,
- Handling creditors' claims and the estate's claims against others,
- Making investment decisions,
- Distributing property to beneficiaries, and
- Liquidating assets if necessary.
It's critical that you designate at least one backup executor. In the event your first choice becomes incapacitated or passes away before the time comes to settle your estate, an alternate needs to be place.
Questions? For help ensuring you can maximize your tax deduction, please contact us.
Scott T. Ditman, a tax partner and Chair, Personal Wealth Services at Berdon LLP, advises high net worth individuals and family/owner-managed business clients on building, preserving, and transferring wealth, estate and income tax issues, and succession and financial planning.