Selecting the person to shoulder the responsibilities of following your final wishes is one of the most important decisions you make. Are you one of the many people who choose NOT to disclose the identity of the executor of their Last Will and Testament, EVEN to that executor?
If you’re like many people, you’ve named your spouse, a younger family member or a trusted friend as the executor, or fiduciary, of your estate. That’s the person who will make sure your instructions are carried out according to your wishes.
Has Your Executor Agreed to do This?
Your Last Will and Testament is one of most essential contracts you’ll ever prepare (and update). Your executor must be prepared to start working at a moment’s notice, act in good faith and honesty on your behalf, and settle your estate according to the terms of your will. It’ a heavy responsibility, not a gift.
Did You Really Sign a Contract?
When you initialed each page and inked your signature on the final page of your Last Will and Testament, you signed one of the most important contracts you’ll ever sign that isn’t a contract. You gave trust and responsibility to another person.
This assignment, unfortunately, may lack some of the elements required when entering into a contract. Definitions of contracts include phrases such as:
- mutual assent, expressed by a valid offer and acceptance
- a promise to do something
- a voluntary, deliberate, and legally binding agreement between two or more competent parties
These phrases include offer, acceptance, promise, competent.
“According to Benjamin Franklin, the only certainties in this life are ‘death and taxes.’ Planning for the future, including the reality of death, is part of your responsibility to your family, heirs and to yourself.”
Selecting Your Executor
Here are some qualities to consider when choosing your executor:
- Is the person trustworthy? Your executor will know more about you and your secrets than anybody. You don’t want that information shared among the family members or community. If you worry about an individual ‘spilling the beans’ if they knew they were the executor, that’s a valid signal to reconsider your choice.
- Is the person organized? Executing a will involves details, deadlines and decisions. Missing or being late in protocol can draw out the process and financially drain the estate.
- Is the person financially savvy? There will be payments to be made and investment accounts to be understood. There could be extenuating circumstances and recent changes in your finances that skew your original plans. Your executor could also be responsible for handling such tasks as filing your final tax returns to more complicated issues such as inheritance taxes on stocks.
- Where is this person located? There can be court appearances, mail to be checked, bills to be paid, and property to be maintained, to name only a few. These details must be handled routinely and paying someone else to do it can cause additional problems, as well as becoming a financial drain on the estate.
- Is this person a good communicator? A lack of good communication skills can override organization and financial knowledge.
- Is this person compassionate? Your family will be grieving, possibly not thinking as strategically and rationally as usual. Or, to the contrary, they may be acting as irrationally as you expect.
Is Your Executor Really Your Fiduciary?
Have you asked your chosen executor if he or she is willing and able? Has your chosen executor agreed to accept the responsibility?
“A fiduciary relationship encompasses the idea of faith and confidence and is generally established only when the confidence given by one person is actually accepted by the other person. Mere respect for another individual’s judgment or general trust in his or her character is ordinarily insufficient for the creation of a fiduciary relationship.”
Estate and Financial Planning
Are you sure you made the best decision selecting your executor, or keeping your executor informed and ready to carry out your wishes when the time comes?
You’re concerned, that’s reason enough to begin a review.
Have you been unable to even begin the process of preparing your Last Will and Testament?
Let’s open that conversation.
Are you the executor of an estate and this is your first experience with filing estate tax returns?
We’ll take care of it.
Call us: 734-285-6008