What Does the Executor Do?
The Executor of your estate is responsible for taking care of everything necessary to wrap up your affairs and assure that those whom you want to receive your worldly possessions receive them with the least amount of difficulty. The executor will pay off your debts and close your accounts. Retirement accounts which must have a designated beneficiary when they are set up and life insurance proceeds will pass outside of probate. These need to be identified to your executor so the heir can be notified to receive the asset.
If you die intestate (without a will) the courts decide who gets your assets. This process is almost always messy and very public. Should prospective heirs disagree over what is rightfully theirs, the process can drag out for a very long time. Prepare a will if you haven’t already.
Whom should you pick?
Married couples generally name each other as Executors or each other’s estates. In such cases a back-up person needs to be selected carefully.
The executor needs to be able to manage financial decisions and naturally be trustworthy and organized. They also need to be available. The simplest estate can take nearly a year to close and a larger estate over three years. The average is 16 months. There is a significant commitment of time involved.
Some people pick Co-Executors. Sometimes this decision is made to avoid hurt feelings, however, this is often not a good decision. It complicates the process when two signatures are required and allows for challenges should the co-executors disagree. Estate planning attorneys recommend naming an Executor and a Contingency Executor in case the named Executor is unable to perform the duties when called upon rather than equal co-executors
You should make sure that the people you select as Executors or Contingency Executors are willing to accept the responsibility. No surprises. He or she needs to be ready to step in when called upon. If there is no one in your life whom you can trust to take on these responsibilities you have the option of naming an estate planning attorney, accountant, or trust company.
Also, Executors are generally paid a modest fee based on state law and the size of the estate (although some individuals choose not to receive pay). State laws differ on the amount.
Decide but review.
It is not a good idea to appoint an Executor and forget about it. Things change. It is a good idea to revisit your estate plan every three to five years. Life changes, laws change, your estate changes and your planning should reflect these differences as time goes on. Your prospective heirs may be more recently born or may have died. The life and health of the Executor you selected may also change over time. It is a good idea to reconfirm his or her willingness to serve as Executor as time rolls forward.