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Estate Planning Lawyers: Guide to Choosing an Executor

Estate planning lawyers recommend that your executor is organized and

What is an Executor

All estate planning lawyers will tell you that being an executor of someone’s will is a time-consuming, thankless and often miserable job. Executors are charged with the task of sorting through the remains of someone’s entire life, while ensuring their final wishes are properly and legally carried out. With all these responsibilities, it’s a wonder why any estate planning lawyers would advise their clients to become an executor. The reality? Estate planning lawyers don’t advise clients to become executors – rather, they are chosen by their loved ones.

Who Should be Executor of your Will

Estate planning lawyers provide minimal guidance because you can choose anyone (with some minor restrictions – below) to be in charge of your will. Straightforward wills created by competent estate planning lawyers have the potential of being carried out by a “lay” person without any legal or financial background, knowledge, or assistance.

Sometimes, the choice is obvious. For instance, if you’re married, you should name your spouse in your will as initial executor. Why? Since the surviving spouse will be more impacted financially than anyone else, it makes sense for your spouse to be in control. You should have at least one back-up in case your spouse is incapable, doesn’t want to act, or you happen to pass away simultaneously (i.e. car crash). Common alternates are siblings, children, grandchildren, and other trusted individuals that are honest, good communicators, and organized to effectively handle the administration of the estate. If no executor is named or no one can act, the Court will pick one.

Who Cannot Act as Executor of your Will

Anyone can be executor of your will with the following major exceptions:

  1. Children under the age of 18 typically cannot be executors.
  2. Felons cannot be executors.
  3. Some states have limitations on out-of-state executors, requiring them also to be primary beneficiaries.
  4. Some states (California, for instance) require out-of-state executors to post a bond (even if the will waives it) to insure the estate against wrongful use.

Executor Rights & Responsibilities

Estate Planning lawyers advise their clients that choosing an executor is a major crossroad decision of their overall estate planThe executor is in charge of the following tasks:

  1. Managing estate assets.
  2. Determine debts, pay all taxes, and other “legitimate” claims against the estate.
  3. Collect assets and information on beneficiaries.
  4. Distribute the estate to beneficiaries pursuant to the will or intestacy.

The responsibilities look like the job of estate planning lawyers, which begs the question. Do you need that kind of background to be the executor of an estate? Not necessarily. However, estate planning lawyers can be helpful in performing many of the tasks associated with the estate administration. But, remember, the executor must make all final legal and financial decisions. The job of estate planning lawyers is to provide information so a reasoned decision can be made by the executor.

Executor Compensation

The executor fee is calculated as a percentage of probate assets, not time spent. The amount received is considered earned income and is taxed in the year received. Executors may take their reasonable commission even if they are also a beneficiary. Many executors waive their commission due to the income tax implications.

Estate Planning Lawyers Caution to Executor’s Concerning Legal Liability

Executors are held to high “fiduciary” standards. Charges may be brought by beneficiaries of the estate if the executor has spent estate assets unnecessarily, oversaw a diminution of estate assets due to lack of diversification in investments, or otherwise betrayed the trust or the beneficiaries. The duty extends so far as to find executors legally liable if they fail to understand and take advantage of complex legal and tax concepts like “portability” of the estate tax exemption for married couples. The prerequisite to taking advantage of the new “portability” law is to file an estate tax return (IRS form 706) when the first spouse dies, even if no tax is due. The return is due 9 months after the death of the first spouse. If the executor fails to file the return or misses the deadline, the spouse loses the right to portability, giving rise to executor legal liability.

About Sean Hanley

Practicing law since 2007, Sean specializes in the ever-changing laws related to real estate, business and estate planning. Embracing technology with a focus on personalized service, he understands the challenges of living and thriving in Silicon Valley. Tapping into his education in economics and business administration, Sean also serves on the non-profit Willow Glen Business Association.

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