Wealth Planning Insights

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Many people put their estate planning on the back burner. Sometimes it is just because it is a topic they don’t want to think about. But often it is because they are conflicted about who to put in charge of their estate when that time comes.

We encourage our clients to go deep when naming an executor. In addition to a primary, it is a good idea to name two or more back up persons in case the primary executor is unwilling or unable to serve. Typically, clients name their spouse as primary executor, followed by one or more of their children as successors. In most cases, this should suffice. However, in more complex estates, family or friends may not be the best way forward. For example:

• The spouse maybe unwilling or unable to handle the complexity.

• Adult children and friends are either too far away or they may lack the basic skills needed to do all that is required.

• Friends also may be too close to your age to be relied upon.

The Independent 3rd Party Executor

If you are facing this dilemma, consider naming (and hiring) someone outside of your circle of family or friends to serve as your executor. Look for individuals with previous experience acting as a third party executor for estates with a similar level of complexity as yours. You may want someone with a key skill set, such as expertise in accounting or business operations.

Different Ways to Serve

These individuals work two ways. The most obvious is being named in your will as your primary executor. (Your executor may hire one or more third parties to assist the surviving spouse with an estate with many moving parts.) For instance, this outside person may take the lead on winding down a business operation, dividing and distributing trust assets, and/or overseeing the sale of real property, etc.

Independent executors charge in a variety of ways, from a flat fee to an hourly fee with a retainer to assist the estate over a period of months or years.

Although an independent third party will add a layer of expense to your estate, we believe naming an experienced person(s) may be the best for your beneficiaries.

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