For most people the cornerstone of their estate plan is their Last Will and Testament. Whether your Will is your entire estate plan or just the starting point for a complex plan, you must make a number of important decisions during the creation of your Will. One decision that people often take lightly is the appointment of an executor. This can be a huge mistake. In fact, appointing the wrong executor can significantly impact the success of your estate plan.
When you die your estate will likely need to go through the legal process known as probate. The purpose of probate is to ensure that all your estate assets are accounted for and taxed, creditors of your estate are paid, and assets are transferred to the intended beneficiaries at the end of the process. Although a court must over-see the probate of your estate from a legal perspective, the individual who handles the day-to-day matters involved in probating your estate is the person you appoint as executor in your Will.
The duties and responsibilities of your executor will depend on a number of factors such as the size and complexity of your estate, the type of probate process required, and whether or not a challenge to your estate is filed. Even a simple estate where litigation is not part of the probate process can take more than six months to probate. The larger and more complicated the estate the longer it takes to probate. Your executor must remain in his or her position until the court is satisfied that probate may terminate.
While the duties of an executor can vary, some common duties include:
- Locating, securing, inventorying, and valuing all estate assets.
- Preparing the documents necessary to open the probate in the appropriate court.
- Notifying creditors of the probate.
- Reviewing creditor claims.
- Paying creditors out of estate assets.
- Managing estate assets throughout the probate process.
- Preparing the documents required to legally transfer the estate assets to beneficiaries at the end of the process.
As you can see, the job of executor is an important, and often time-consuming, position. Most executors retain the services of an estate planning attorney to assist throughout the probate process; however, your executor will still be responsible for supervising the probate process and for carrying out the day-to-day tasks. An error by your executor could put your entre estate plan in jeopardy. A mistake could also cost your estate a significant amount of money—money that should go to your beneficiaries. Considering the importance of your executor, it is a wise idea to spend sufficient time deciding who to appoint to the position.