Six Things to Consider Before Accepting the Role of an Executor of an Estate

Blog Executor things to consider

Being asked to be the executor of an estate is a significant responsibility and an honor. However, it’s crucial to carefully consider several factors before accepting this role. Here are six key things to ponder:

1. Professional Liability

If you are already a professional lawyer or financial advisor, consider the potential risk to your practice. Disgruntled heirs may direct their frustrations toward the executor for various reasons, such as dissatisfaction with how the trust was crafted, their compensation, or how the funds were managed post-death. For instance, if an investment portfolio declines in value after the decedent’s death, heirs might blame the executor for not being conservative enough, regardless of past performance. Conversely, the executor is unlikely to receive credit if the estate grows. This role can quickly become a thankless, no-win scenario.

2. Compensation for Non-Professionals

If you are a non-professional, ensure the trust agreement includes provisions for hourly or other forms of compensation. Being an executor is far from a leisurely task; it’s a complex and time-consuming responsibility. It can also be the highest honor given to someone the decedent cared about. I often advise clients to include a clause in their trust allowing the executor to receive compensation for their work. Additionally, an option for the executor to accept or decline this compensation at the time of execution can be beneficial.

3. Knowledge of Family Dynamics

Understanding the family and the nuances of their relationships is vital. If you are aware of potential difficulties with some heirs, it’s advisable to have a conversation with these individuals before accepting the executor role. Alternatively, the plan creator can address these issues before you take on the responsibility.

4. Process Orientation

The duties of an executor involve a series of tasks that need to be completed in a specific order, or often, multiple tasks simultaneously. Being process-oriented and having strong organizational skills is crucial to manage these responsibilities effectively.

5. Financial or Legal Experience

Having financial or legal experience can be highly beneficial. If you lack this expertise, consider whether you are comfortable seeking advice and working closely with financial or legal professionals throughout the process.

6. Transparency from the Plan Creator

The plan creator must be willing to share very personal information with you, including passwords, investment accounts, and potentially sensitive secrets. For example, if the decedent had previous marriages or children they want to include in the estate, this could create tension if not communicated clearly. Transparency from the plan creator will help you navigate these challenges and avoid being caught in the middle of family conflicts.

By carefully considering these factors, you can make a more informed decision about whether to accept the role of an executor. While it is an honor, it’s also a significant responsibility that requires careful thought and preparation.

Ian Goldey, the author of this article, brings over three decades of experience as a private wealth manager, assisting families with their financial planning. He has applied this extensive knowledge, along with his partners to create WhenIDie.com, a digital platform that simplifies the entire process of death planning and more. Try it free for 30- days. Apply this code 2024BLG15 for a 15% discount!

Legal Disclaimer

The information provided in this blog is for general informational purposes only and is not intended to be tax, legal, or financial advice. Readers should not act upon this information without seeking professional counsel tailored to their individual circumstances. While we strive to ensure the accuracy and reliability of the information presented, we make no representations or warranties regarding its completeness, accuracy, or current applicability. The use of this blog does not create an attorney-client or accountant-client relationship. For personalized advice, please consult a licensed attorney, tax advisor, or financial professional.

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