How to Select, and Serve As, An Executor

We’ve talked briefly about estate planning and asset protection. But what about executing a will? Most seniors understand the importance of having a will, though they won’t be around to see it probated. And this is where knowing proper procedure is critical.

What exactly does an executor (also known as a “personal representative”) do? According to The Office of Chronic Care Advocacy, the executor acts as a chief administrator of the estate:

• Ensuring receipt of all life insurance and retirement plan benefits
• Paying any estate debts or expenses
• Filing the necessary tax returns and paying the appropriate federal and state taxes
• Disbursing assets to the beneficiaries.

To choose an executor:

1. Select someone who is willing to serve. This may seem obvious, but many years can elapse between the time someone chooses an executor, and when that person needs to step into the role. It’s a major responsibility, and not everyone will want it. Provide for an alternate in case your first choice is unable or unwilling to perform. Naming a spouse, child, or other relative as executor is common, and he or she can hire professional assistance as needed.

2. Make sure there is no conflict of interest. A business partner or spouse from a second marriage, for example, could have personal goals that differ from those of the person seeking an executor.

For the executor:

3. Find the original will. Only an original will can be probated (have its validity verified in order to ensure the timely transfer of assets) without court intervention, which can be a lengthy and expensive process. Usual places to look are the senior’s office, desk or home safe — wherever he or she kept important papers. Another popular option is a safe deposit box, which the executor will need signatory authority to open. The executor can also call the attorney who drafted the senior’s will, who is likely to have noted where his client intended to keep it.

4. Familiarize yourself with the provisions of the will, so you understand the senior’s wishes as to how he or she wants the estate to be distributed.

5. Seek professional advice. In order to correctly administer the estate and avoid mistakes, at this point it’s wise for the executor to consult an estate attorney, tax accountant, appraiser, or any other professional(s) who can provide the necessary expertise.

6. Locate and protect the assets. The executor should also contact any life insurance carrier or retirement account custodian to determine who is named as the beneficiary of these accounts. It is possible that the estate will be the beneficiary, or the beneficiary could be a named individual.

7. Pay valid claims against the estate, assuming the estate has sufficient assets available. Depending on the circumstances, you may also need to file an income tax return for the estate for the year(s) in which the estate remains open.

8. Distribute the estate to the beneficiaries named in the will and account for the administration of the estate to the Commissioner of Accounts who was assigned to this estate when you qualified as executor.

The entire process can be complex, challenging and time-consuming, and can take a year to eighteen months to complete.

Reverse mortgage professionals may wish to share this summary with HECM clients, prospects and other seniors within your purview, since selecting an executor is as important as choosing a Power of Attorney and protecting elders from scams, identity theft, and other forms of financial fraud. The more informed and prepared someone is, the smoother the transition will be for everyone involved when the time comes.