7 Things to Know About Appointing an Executor

1. Obtain a death certificate, find the will and hire a lawyer, if needed. A death certificate will be required in the process of settling your estate. It is issued by your county of residence and signed by the physician who verified your death.

If you’ve left a valid will, then your stuff will be divided among the individuals designated, as well as in any trusts that you may have established. Be advised that the beneficiaries you’ve named on your insurance policies and retirement and other financial accounts will supersede those in your will. Because lives and circumstances change, you’ll want to review all beneficiary designations periodically, and update them as needed.

Will a lawyer be required? That depends on the size of your estate, the state you live in, and the quality of the relationships you have with your family. Keep in mind that the executor has a fiduciary obligation to the estate, says Nicholas Bunio, a CFP at Brookstone Wealth Advisors in Downingtown, Pennsylvania: “If [executors] don’t know what they’re doing, they must find an attorney who does. Otherwise, the beneficiaries of the estate could sue the executor!”

2. Notify the probate court. Probate is the distribution of your assets after you die. Your executor will need to petition the probate court in the area where you lived. They’ll do so by filling out a form to obtain a letter of administration or testamentary they’ll need to access your accounts and other assets. Both that form and directories of probate courts in different states can be found online.

3. Inform all interested parties. Your employer, work colleagues and friends might already know that you’ve died if they’ve seen an online obituary or attended your funeral. However, your death must be reported to Social Security and to the banks and other financial institutions where you have accounts.  

4. Pay all debts and file all taxes. Your executor must settle all of your obligations with your creditors, and file your income taxes and inheritance or estate taxes if applicable.

5. Inventory your assets and plan for their distribution. Your executor must determine not only your probate assets but also non-probate assets — that is, property, financial accounts or investments that are not required to pass through probate because they are jointly owned or held in a trust that you established. Next, your executor will determine what will be sold, kept or discarded, according to the will you left.

6. Distribute your assets among your beneficiaries. Once all bills and taxes have been paid, your executor will divide your assets as stipulated by your will.

7. Complete the final accounting, and all required forms. Finally, your executor will dissolve any of your existing accounts and check that the court has everything it needs to complete your estate settlement. 

7 ways to make things easier

If you’re like most folks, you don’t want to be a burden to anyone while you’re alive or when you’re gone. Following these steps will make things go as smoothly as possible for your executor and your loved ones, while eliminating unnecessary costs.

1. Make sure to leave a legal will or estate plan. Otherwise, you will die “intestate,” and your assets will be frozen until the court carefully reviews the estate and decides how your assets will be distributed. This can make the process very hard and long for your family members.

“Surveys show that somewhere between 60 and 70 percent of Americans don’t even have a will,” says Patti Black, a CFP at Bridgeworth LLC in Birmingham, Alabama. “The surviving family members may end up spending more money to clean up the lack of planning than if the deceased person hired an attorney to prepare a will, power of attorney and advanced health care directive.”

Who will get what from your estate? Every state follows different rules for dividing property when there’s no will. Most often, your spouse will be the first priority, followed by children, grandchildren, parents and siblings.

2. Include clear instructions. Executors do not necessarily know about brokerage accounts, life insurance policies, online passwords, etc., Frisch says. Being organized and leaving detailed instructions will make it easier for your executor.

3. Make sure your executor is up to the job. Look for someone who’s honest, trustworthy, organized, responsible, and able to handle the potential stress and time commitment, Wojtkowski says. “They don’t need specific legal or financial expertise, but it’s helpful. More important is communicating effectively, making tough decisions, and keeping precise records.”

Frisch says, “In some instances, it may be better to have coexecutors, or professional help.”

4. Get the prospective executor’s consent and make the responsibilities clear. “Since settling an estate can be a long and involved process, probably the most important thing is to choose someone willing to perform all the various duties involved,” says Peter Palion, a CFP at Master Plan Advisory in East Norwich, New York.

Valecka says she may write a book about being executor to help her clients understand how much time and effort may be involved. For example, she needed to obtain an original marriage certificate to present to Social Security so the widow could switch to her late husband’s higher benefit. “Small things like original paperwork having to be ordered takes time.”

5. Consider the size of your estate. If you have $500,000 in total assets, naming a family member may be fine, perhaps with the help of an attorney, Bunio says. “But if we are talking $1 million or more, I would not name a family member as executor, but a lawyer/law firm. Or, name a family member with the stipulation that a lawyer must be hired.”

6. Suggest how to get help if hiring a lawyer is too costly. “Your executor could ask the court to find one for you or seek assistance from the state,” Bunio says. “I have heard of charities that help with this, as well as pro-bono firms.”

7. Finally, name an alternate, if you can. “It’s usually best to name a second individual as an alternate in case the first one cannot act due to disability or death,” Palion says.