Another in our series of our best blogs from the past. This one is from July of 201.
Thereare a number of decisions to be reached when planning for your estate and notleast among them is the choice of executor. A poor choice of an executor, or adisconnection between executor, estate, and beneficiaries can hobble even thebest laid of estate plans. Indeed, Reuters offers one unfortunate beneficiaryâ€™stroubles in a recent articleon the topicand offers some solid suggestions to consider.
Thebeneficiary was Stephanie Stephens, who, in the end, was surprised to find thatthe estate she received had shrunk by $129,000, something she angrily blames onthe executor. Apparently, the estate had incurred a $104,000 loss when theexecutor failed to pull the assets from the flames of the 2008 financialmeltdown and, insult to injury, that executor was then entitled to a fee ofanother $25,000. Needless to say, she wasnâ€™t happy. Whether or not the executorwas to blame may be debatable (since it was the beginning of the recession,after all) but there are other wrinkles to the story. For example, Stephaniehadnâ€™t met the executor of the estate until after her relative passed away andso only knew him as a somewhat disinterested party. Further, she was surprisedby the executorâ€™s fees and even felt them to be excessive.
Inthis case, the beneficiary was, at best surprised (and at worst, victimized) bya situation she did not understand. Her case offers an example of a kind ofdisconnect that can all-too-easily arise between executor, estate, andbeneficiary.
Reuterâ€™soffers three general principles to bear in mind:
Know the estate. Choosing theright executor has a lot to do with the nature of your estate. Is it complex orsimple? Are there a lot of moving parts and assets that may be at risk? Afamily member can likely carry out a simple estate but a professional might benecessary for those more difficult ones.
Know the person. Just becausesomeone is a â€œgood person,â€ this does not mean they should be doing businessfor you. You need to know that they are well-intentioned and interested incarrying out the tasks, but above and beyond that you must also know that theyhave the proper skills and business mindset to carry out your plans and takecare of your assets in your absence.
Let your familyknow - communicate.Itâ€™s a difficult conversation to have but itâ€™s important to relate your plansdirectly so that your family knows your decisions. Further, youâ€™ll want to besure they are aware of the cost of the executor so it isnâ€™t the surprise it wasin Stephanieâ€™s case (in fact, you yourself may want to be sure you are aware ofthe costs, too).
For more information on this and other estateplanning subjects, contact IdahoEstate Planning and schedule a consultation. Remember,good planning is no accident.