Parents do so much to make sure they are treating their children equally. This is all good when it comes to buying bicycles or sharing candy. However, when it comes to naming your executor, equal is not always best, says a recent article titled “3 Mistakes to Avoid When Choosing Your Personal Representative of Your Estate” from The Street.
The most common mistake parents make is naming all of their children, with the hope they’ll set aside any differences and rise to the occasion. Another is to make an age-based decision and name the oldest child as the executor. Maybe worse: tossing names into a hat and picking one.
The wrong decision can lead to more than fighting among siblings. Fighting often escalates to litigation and wounds that never heal.
The decision of who to name as a personal representative, agent or executor needs to have a business approach. Remove emotions from the equation and examine your children’s strengths and weaknesses.
Your executor, the agent named to carry out instructions in your will, has many responsibilities, including:
Obtain the last will and testament and file it with the court.
Obtain multiple original copies of a death certificate.
Inform heirs and relatives of your death and of the open contest period when they may challenge the validity of the will.
Use estate funds to settle outstanding debts.
Maintain any real property, until the estate is settled.
Notify banks, government agencies, insurance companies and creditors of your death.
File final personal income tax.
Create a complete inventory of the estate and, when the will is deemed valid by the court and creditors have been paid, distribute assets.
Make court appearances on behalf of the estate during probate.
File estate taxes.
The executor must be able to manage these and other matters, while keeping the peace in the family and standing up to any challenges. Not everyone is up to the task.
Naming more than one personal representative so no feelings get hurt.
If your children have a history of working well together and are all equally versed in personal finance, this might work. However, more often than not, it’s a recipe for disaster. By asking so much of them during a highly emotional time, even the best sibling relationships will be tested.
Picking the wrong child for the job.
Not only does the person need to be responsible, reliable, organized and trustworthy, but they need to live close enough or be able to travel if you live far away. If none of your children are good candidates, speak with an estate planning attorney to explore other options.
Not preparing the person ahead of time.
Someone who has never served as an executor before is not likely to fully understand what their role will be, what tasks need to be accomplished and how much time it will take out of their schedule. Talk with the person you chose as your executor and provide them with all the details. Tell them where personal property is located and where you are storing your last will and testament. Share the names of your estate planning attorney, financial advisor and CPA.
Good estate planning and clear communication is the best bet to avoid acrimony between siblings after parents die. Make sure that they understand your desire for the family to stay together and give them the tools to do so.
Reference: The Street (July 28, 2022) “3 Mistakes to Avoid When Choosing Your Personal Representative of Your Estate”