What should I consider when I select an executor for my will?

By Chris Gallant AAA
A:

The executor of a will is the person designated with the task of administering the will's instructions. The responsibilities of an executor include making sure all assets are accounted for, all existing debts and tax obligations are paid, and that remaining assets are distributed to the correct parties in accordance with the deceased person's wishes. These are all important tasks and, therefore, selecting an executor is an important decision.

First of all, you should consider that selecting a beneficiary as your executor might lead to a conflict of interests because a beneficiary who is also an executor may be required to choose between awarding assets to him or herself or to another beneficiary. This situation is best avoided from the beginning by selecting an executor who is not a beneficiary.

In addition, if your assets include a business, you should be cautious about selecting an executor who is also a partner in your business. Once again, this situation can create conflicts of interest because the executor/business partner may have motivation to continue running the business, while it may be in your beneficiaries' best interest to sell it.

If your assets are primarily marketable securities, you do not need to be too concerned with your executor's business or financial knowledge. However, if you own a wide range of complex assets, you should select an individual with experience in those types of assets. If you don't have a friend or family member with the necessary expertise, consider hiring a lawyer, accountant or similar type of professional to act as your executor for a fee.

Finally, it is also a good idea to try to select someone who knows your beneficiaries and can carry on a healthy working relationship with them. To learn more, check out Choose The Right Executor.

RELATED FAQS

  1. What is the difference between portfolio management and financial planning?

    Understand the difference between financial planning and portfolio management, and learn which financial professionals can ...
  2. Under what circumstances will a contingent beneficiary receive an insurance payout?

    Learn the different types of contingent beneficiaries and what conditions must be met for these beneficiaries to receive ...
  3. What happened to Nathan Rothschild's estate after his death?

    Learn more about the Rothschild fortune and the business operations that brought this family substantial success in finance ...
  4. What advice has Richard Branson given to would-be entrepreneurs?

    Discover how entrepreneur Richard Branson amassed his fortune, and learn what words of wisdom he offers to others trying ...
RELATED TERMS
  1. Fintech

    Fintech is a portmanteau of financial technology that describes ...
  2. Endowment Effect

    The endowment effect describes a circumstance in which an individual ...
  3. Anchoring and Adjustment

    Anchoring and adjustment is a cognitive error described by behavioral ...
  4. Robo-advisor (robo-adviser)

    Definition of Robo Financial Advisers
  5. Laughing Heir

    A distant relative who has inheritance rights despite not having ...
  6. Ultimogeniture

    A system of inheritance whereby the youngest son gains possession ...

You May Also Like

Related Articles
  1. Professionals

    How to Evaluate a Robo-advisor

  2. Professionals

    Who Wants to be a 401(k) Millionaire?

  3. Professionals

    Are Longevity Annuities in 401(k)s a ...

  4. Professionals

    Should Investors Nix Actively Managed ...

  5. Professionals

    How to Train Your New Financial Advisor

Trading Center