Many of us naturally turn to a close family member to serve as the executor of our estate. It’s understandable given the incredible amount of trust that’s required. But what tends to get overlooked, is just how complex the job can be—how much time it can require, and the huge emotional and personal toll it can take.
Settling your estate can take 18 months or longer to complete. And your executor needs to undertake many highly technical responsibilities such as:
- Adhering to the stated terms of your will and any trust documents
- Identifying, collecting, and valuing all your assets
- Identifying and paying your outstanding liabilities, debts, and expenses
- Developing an unbiased, impartial plan to distribute your assets
- Preparing and filing income, estate, gift and generation skipping tax returns
- Submitting all necessary court-mandated filings
Along with important decisions about taxes, investments and distributions that all need to be carefully documented, your executor must also assume personal liability for any mistakes that may occur. Often, however, the toughest challenge is trying to balance the competing interests of beneficiaries who may be close friends or relatives.
Factors to consider
A surviving spouse or child may be a suitable choice—someone you can trust to carry out your wishes and who knows where all your assets are located. But make sure they’re well-organized, responsible, and have a fairly good understanding of financial assets and the estate settlement process. Also, they should be young enough and healthy enough that they’ll likely outlive you.
Perhaps most importantly, your named executor needs to be good at conflict resolution—especially if there are any long-standing family tensions. Keep in mind, your executor will have to balance competing interests of your beneficiaries and may even have to deny specific requests. Often, it’s not the large assets like bank, brokerage, and retirement accounts that are difficult to distribute. It’s the smaller sentimental assets (such as an oil painting, vase, or heirloom sterling silver) that create squabbles and sometimes even lead to potential litigation.
Alternatively, you might want to consider naming a corporate trustee to serve as executor (or co-executor to provide counsel and support to a loved one who’s acting as executor). Corporate fiduciaries such as Truist have the financial and legal expertise needed to manage even the most complex estate settlement challenges. And having an unbiased third party can also help fairly resolve any potential disputes between beneficiaries.
Lastly, just like you do with your beneficiary designations on retirement accounts and insurance policies, you should revisit your choice of executor every few years to determine if they’re still appropriate. Has the individual moved far away? Have they become estranged from your family through a divorce or falling-out? Or maybe they’re no longer able of fulfill the duties due to a physical or mental impairment? The thoughtful selection of a capable executor just might be one of the most important legacies you leave your family.