Bensman Risk Management, Inc.


Insurable Interests

Bensman Risk Management, Inc.
2333 Waukegan Road Suite 275
Bannockburn, IL 60015
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Insurable Interests

Vol. 4, Issue 5January 2009

FINANCIAL INTERESTS

Role of the Executor

The executor of an estate is the person responsible for ensuring that the wishes of the person who died are carried out in the way they envisioned. This is a very important job, and you should weigh it carefully, whether you are being asked to serve as an executor for a friend or relative, or you are choosing an executor for your own estate.

The executor is usually named in the will. It can be a family member or a close friend, or it can be a trusted financial or legal adviser. Usually the executor is not paid, although you can choose an outside professional and pay that person for their time and expertise. Some people choose to do this, especially if the estate is very complex or likely to be contentious.

The volume of the executor’s tasks depends in part on the situation. For example, the executor may be expected to handle things like notifying people about the death and canceling credit cards and other accounts. But other people also can do the notification, and if the spouse survives, the spouse can handle any credit card or other account changes.

However, all executors have these responsibilities:

  • Begin the process of probate. The executor needs to find a lawyer to enter the estate into probate. If the executor is a lawyer, he can do this himself. However, it is best to engage a lawyer experienced in probate, especially if the estate is complex.

  • Identify and place a value on all the deceased’s assets. Again, the complexity of this task depends on the quality of the record-keeping and on whether there is a surviving spouse or someone else who shares ownership of those assets.

  • Make sure the estate pays its taxes and any bills it owes.

  • Distribute the assets as outlined in the will and close out the estate.

    So who should be an executor? Under most state laws, anyone over the age of majority who is not a felon can be an executor. But when you are choosing an executor, or agreeing to serve as one, it pays to be a little more discerning.

    Many people choose a family member, such as a spouse or adult child. The advantage to this choice is that the person is likely to be familiar with the deceased’s assets and wishes. A family member also has an obvious interest in settling the estate and distributing the assets as soon as possible.

    However, a family member may be too close to the situation. A spouse could be too distraught to make decisions, for example. Or choosing one child over another could cause friction or conflict. Plus, a family member may not have the legal or financial expertise to handle the job. Of course, a family member named as an executor could hire an expert, but that would decrease the final value of the estate.

    Some people choose a trusted outside adviser, such as a lawyer or business partner. In this case, the executor may have greater expertise and also may be more removed, and therefore more objective. However, the executor also may not be as familiar with the deceased’s life and may not have the time to handle the estate expeditiously.

    It also is possible to name co-executors, such as multiple family members or a family member and an outside adviser. This solution is more often chosen by people whose estates are large or complex, or if one executor lives far from where the estate is being probated.

    Most experts agree that anyone choosing an executor should talk with the person about the choice, and about what they would be expected to do. If you are asked to be an executor, make sure you are ready to take on all the responsibilities. And if you are asking someone to be an executor, be understanding if they say they cannot accept the honor.

    This article was created by Osmosis Digital Marketing for use with permission by The Bensman Group.

    Photo courtesy of iStockphoto.com

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