Executors, or personal representatives in some states, are responsible for administering a person's estate after that person dies. These duties include collecting and managing any assets, paying off any bills and taxes, closing the estate and eventually distributing what is left of the assets.
Choosing the right person for this job is important, for a number of reasons. While most people choose a family member, this may not be the best approach for everybody. Though a family member may have an intimate knowledge of your wishes, they may not have the right personality, skills and knowledge it takes to act as your executor.
For one thing, a family member may not be objective enough to deal with the dynamics that arise after your death. Family members, as is well known, sometimes polarize after the death of a loved one. An executor needs to be able to navigate family relationships in a way that will honor family members while carrying out his or her duties in a professional way.
In addition, while an executor or executrix doesn't need to have any professional experience in the area of estate administration, financial planning or another related discipline, it is important that they know enough to know when they need to delegate duties out to the appropriate professionals.
In addition, there is the possibility that the executor could face liability for mismanagement of the estate due to lack of understanding or expertise. This can be a real headache for the executor.
Each family has unique circumstances and needs, and there is no hard and fast rule about who should act as your executor. It is important, however, to think carefully before selecting the person you are closest to. Perhaps that person may not suited to the task after all?
Those who have questions about these and other estate planning questions should work closely with their estate planning attorney to ensure they select the best executor possible, given their unique situation.
Source: Money Management, "Don't misjudge executor liabilities, says Equity Trustees," April 9, 2013