Estate planning transfers your assets to your beneficiaries quickly and with minimal tax consequences. It can also assure that family members know how you would like your financial and medical affairs to be handled if you become incapable of making your own decisions.
A major part of estate planning is naming an executor to carry out the wishes you spelled out in your will upon your death. The role of executor is important, and the decision is not one to take lightly. An executor can be an individual whom you trust or even an organization or institution, such as a trust company. When considering executors, keep these things in mind:
Know the responsibilities of an executor. These include, but are not limited to:
Collecting your assets.
Notifying Social Security and other agencies and companies of the death.
Canceling credit cards, magazine subscriptions.
Distributing assets according to the will.
Make a list of prospects for the executors job. Think about the first people who come to mind that you think would serve well in the capacity of executor. By each name list the benefits and downsides of choosing this person or organization.
Take relationships into consideration. A friend, spouse or other family member is often the first choice of executor for many people. Executors are legally entitled to payment for his or her services, which is paid out of the estate. While a friend or family member will usually waive an executor's fee, going the less expensive route may not always be the best choice. An impartial executor, one who is not closely entwined in your family, may be able to impartially carry out the details of your will and not be moved by family dissension that may occur.
Make sure the person you pick has a knowledge of estate. Consider those who are familiar with your estate, family and other business operations. The executor must be ready and willing to act on your behalf. A knowledge of business, taxes or law can also be helpful. Talk to this person/group before you make your word final so that you can determine if he or she is capable and on board with being the executor of your estate.
Keep grief in mind when making a selection. Think about how the executor will react at the time of your death. Will this person be able to work through your affairs while grieving you?
Think too, about alternate executors. There is no hard-set rule that you must have only one executor. In fact, it's good to have an alternate in the event your primary executor resigns or even passes away before you. Settling an estate can take a number of years, so a backup plan is wise. Also, you may want to enlist professionals to guide your executor. Therefore an attorney, accountant, or bank can serve as an assistant in the process. You can also have multiple executors to handle different aspects of your estate. If you do this, you should include a clause in your will stating how differences of opinion between them are to be settled.
Name a guardian for the estate. An executor and a guardian are not one and the same. If you have children under the age of 18, it's vital to also name a guardian who will care for the children if you are not able to.