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.

Hot Definitions
  1. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  2. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  3. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  4. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  5. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
  6. Relative Strength Index - RSI

    Relative Strength Indicator (RSI) is a technical momentum indicator that compares the magnitude of recent gains to recent ...
Trading Center