In your will, you can name the person you want to manage your estate and carry out your final wishes. This avoids additional charges later. If you die without a will, someone will need to apply to the court to be appointed, which costs money, and whoever administers your estate will likely charge your estate for their services.
It’s usually best to choose someone who is close to you, such as your spouse, a family member or friend who is trustworthy and understands your wishes. You may consider the role an honorary one, but it’s a time-consuming job with many duties. A time of grieving is not a good time for decision-making. It may be better to choose someone who can perform the executor’s duties at arm’s length. Choose carefully and think about the duties that your executor will have to perform.
Choose someone younger than you, rather than someone older whom you may outlive. You may also want to appoint an alternate, if for some reason your executor can’t do the job.
If you own a business, avoid appointing your business’s accountant or lawyer as your executor in case of a possible conflict of interest in dealing with surviving shareholders. If your estate is complex, consider appointing someone with an accounting background or sound business judgement, who will have the expertise needed to administer your estate properly.
You may want to consider appointing a trust company as your executor. One advantage is permanence - the trust company will be there to see that the estate is fully distributed. It will also have the expertise needed to manage large and complex estates. But, having a trust company handle your affairs may seem impersonal, and the fees can substantially reduce your estate.
An alternative is to appoint a close friend or family member as executor, with a trust company or estate lawyer serving as a professional co-executor. This way, someone who knows you well will make sensitive decisions involving your family, but a professional firm will handle the financial aspects and day-to-day administration.
If a friend is designated to act as an executor, it’s possible to set a limit of the customary 5% of assets of the estate plus expenses plus fees for care and management of assets for an ongoing trust. The friend acting as executor can then hire a trust company for professional services that may be billed at a fixed price or on an hourly basis.
The art in drafting the will is to set sufficiently broad guidelines that the executor will be able to invest wisely, sell wisely, and leave promising assets invested if they do not need to be sold. In the past, hobbled by rules that forbade investing in stocks, trustees have wound up investing entire estates in dull government bonds. The financial planner should be a part of the will drafting process and of the estate administration process.
Your executor is responsible for:
Review a thorough summary of the executor’s duties with your executor. It’s important to know whether the person you want as your executor is willing to take on the duties involved.