As you put your will and estate-planning documents together, one of the most important questions you must address is: Who is going to be your executor?
Before we talk about this important decision, let’s discuss generally what it means to be an executor of an estate. In simple terms, your executor is the person who ensures that the wishes you express in your will are followed.
You wanted to give $10,000 to Project Ezrah after you pass? The executor ensures that the check gets sent to the charity.
You wanted your (probate) assets to be put into a trust for your children? The executor is the person who would take your assets and work with the trustee to ensure that those assets are there in trust for your children. Once the assets are in the trust, the trustee would take over for the long term. If your executor and trustee are the same person, then the executor will take off his executor hat and put on his trustee hat to continue to handle the assets.
Your estate is over $675,000 and there are New Jersey estate taxes? Your executor files the tax return and pays the tax to New Jersey.
These are but a few examples of your executor’s responsibilities, and we will discuss even more below. Obviously, you want to be sure that the person you select as executor is someone you trust. You want to be sure that your executor can handle details, can deal with money and will follow through on what you specified in your will. The executor of an estate in New Jersey has a fiduciary duty to the estate, to the beneficiaries and to the deceased person who gave the executor authority to execute his or her final wishes.
When I work with couples, the spouses usually name each other as their executors. We always ask for one or two backup executors. Often people name their children as backups, or, in the case of parents with small children, their close friends or family members as backups. This goes without saying, but you want to be sure that the people you name in your will will be around when you pass. Therefore, if you created a will when you were younger and now the people you named are older, it’s probably a good idea to update your will.
Let’s talk about your executor’s specific responsibilities. Your executor is the person who handles the estate administration (also known as the probate) process. While the tasks associated with the closure of any estate vary with the estate plan, an executor can expect to perform duties that include:
• Gathering documents to file a probate action in surrogate’s court. Documents include the will, birth and death certificates.
• Once the documents are collected, your executor will have to go to surrogate’s court to be sworn in as executor.
• Identify and collect assets of the estate.
• Open an estate checking account for use in settling the estate. Transfer monies of the estate into the account.
• Notify all parties with a potential interest in the estate. This includes heirs, next-of-kin and others. All persons and entities must be notified of the probate within 60 days.
• Apply for insurance proceeds or other benefits due.
• Discover debt and other claims against the estate. Publish a notice for claims against the estate. Review and settle appropriate claims, bills and debt. Legally challenge inappropriate claims against the estate as needed.
• Compute and pay all appropriate taxes of the estate and file tax returns.
• Determine beneficiaries. Take appropriate action, such as selling assets, to ensure monetary bequests are made as directed.
• Distribute all assets as directed.
• Prepare an accounting of the settlement of the estate.
• Work with attorneys and accountants to ensure the entire process is as simple and as easy as possible.
For complex, contested or high-asset estates, retaining an attorney to assist with administering the estate provides the valuable counsel and legal protection you need should the accounting of the estate be challenged.
We’ll conclude with the question I get all the time, especially from older clients: I have two (or three or four) children, can I make all of them executors? The simple answer is yes, but you’re opening yourself up to problems if you do so. Here’s why.
Let’s assume you have two children who seem to get along now. In (too) many cases, one of your children will go into your house, take something, and the other child will be upset. Resentment takes hold. Children start to fight. If your children have to work with each other as executors you are guaranteeing a fight. If they disagree then there will be litigation. We also do estate litigation, and there is nothing sadder than children who fight over their inheritance.
However, if you choose the child who is level headed, whom you trust, and you talk with your family about your decision before you pass, then your children will be prepared for when the time comes and you’ll reduce the fighting to a minimum.
At the end of the day, this is about your legacy. How do you want to be remembered? The more you plan today, and the more you tell your children about your plan, the less your children will fight after you’re gone. You will be remembered for leaving your family intact, in peace and in harmony. Choose the right executor, talk with your family ahead of time and be remembered for good.
Alec Borenstein, Esq., an estate-planning attorney, is a Teaneck resident with offices in Springfield and Brooklyn. His firm’s website is bmcestateplanning.com. If you’d like a free estate-planning consultation in the comfort of your own home or office, please email [email protected].
By Alec Borenstein