One of the most important things to consider when creating an estate plan is who to name as your estate executor. It is a big responsibility with potentially minimal reward. You could choose a family member or friend. Alternatively, you could opt for someone who does it in a professional capacity.
What does an executor do?
To make the correct choice of executor, you need to understand what the role involves. Here are the main jobs:
- Paying for the funeral: This is the first task. While the executor does not need to organize the funeral, they are the person empowered to pay for it from your estate.
- Tracking down all the assets: The executor needs to ensure they have a complete inventory of all the assets. If you do not leave clear instructions on what you own and how to access it, this could take considerable time.
- Notifying people: The executor must inform anyone named as a beneficiary that you have died.
- Settling debts: If you owe money to anyone, they can claim against your estate. Smart estate planning, such as the use of trusts, can protect your assets from creditors.
- Settling taxes: The executor has to get your estate valued and pay any relevant taxes.
- Distributing the estate: Once the executor has paid the creditors and taxes, they can finally distribute your estate to your beneficiaries.
As you can see from the above list, there is a lot involved in being an executor. You can make it more straightforward for them by keeping your estate plan updated and providing as much information as possible.