So, you’ve decided to put together your estate plan. That’s great!
Often considered just for the ultra-wealthy or older generations, estate plans are a crucial component of a complete financial plan. An executor and team of estate planning professionals are a few essential pieces of an estate plan.
An executor is a person you appoint to manage your estate, including dealing with the probate process, paying off outstanding debts, collecting your assets and distributing them to the people or charities that you’ve outlined in your estate plan. Most people choose their spouse or another family member, but that may not be the best fit for your circumstances. If the thought of selecting yours makes you feel overwhelmed, don’t be.
With the right estate planning team, you can navigate the entire estate planning process with less stress.
Three Estate Planning Professionals To Add to Your Roster
One of the best things you can do to execute your estate plan, including selecting an executor successfully, is to assemble your team of qualified estate planning professionals. They include a financial advisor, an estate planning attorney, and a tax professional.
Financial Advisor
A financial advisor can help you design an estate plan that manages your assets during your lifetime and distributes them according to your wishes after your death. Your financial advisor will provide guidance on creating a plan that aligns with your goals and wishes, will help with implementing and monitoring your plan (including assisting with investments, trusts and retirement accounts.) They can also update and educate beneficiaries and even provide recommendations on who may be a suitable executor.
Tax Professional
When working on your estate plan, you may discover that the tax and accounting requirements are out of your scope. In this scenario, having a tax professional can help you stay in complianceGiven the complexities and nuances of federal and state tax law, it’s worth researching to find someone who has experience in estates and trusts to help accomplish your goals. You’ll also want someone you trust to work with the executor on tasks like tax filings and paying final distributions.
Estate Planning Attorney
An estate planning attorney is a bar-certified lawyer who has a specialized skill set to assist clients in preparing their estate, either in the event of death or medical incapacity. Specifically, they assist with:
- Drafting documents in your plan, like your will, trust, or durable power of attorney and ensuring all documents meet state-specific requirements
- Helping your executor navigate or avoid probate court and transfer assets to beneficiaries
- Working with your financial advisor to ensure your assets are correctly titled
- Serving as an ongoing legal guide for and your family as you prepare for different end of life /health scenarios
Each of these individuals will work with your executor and can help you choose an executor by providing insights into what particular skill set may be beneficial given your unique family structure and asset composition. For instance, you may naturally choose a family member such as a spouse to handle your assets. However, if your spouse is not in good health, this could lead to complexity down the road. In addition, if your estate consists of active business interests or other complex assets, having an executor (or co-executor) who is capable of managing this responsibility will be of utmost importance. Generally speaking, you should opt for someone mature, trustworthy, honest, and good with people -- regardless of their age and whether or not they are a blood relative.
In addition to naming a primary executor, it is important to also name successor executors in the event the individual you name as primary executor is unable or unwilling to serve. This could happen for a variety of reasons, including the executor being ill or having his or her own family or work commitments that prevent having sufficient time to devote to the role. While it can be tempting to name a small group of individuals of your own generation (or older!), it’s important to try to also include younger executors as well. In addition, discuss this issue with your estate planning professionals to determine if flexibility can be included in your documents as well to avoid requiring court-intervention should no other named executor be able to serve.
You can rest easy knowing that an executor will work with your vetted estate planning team to handle any complexities that arise. If you do not have these professionals on hand by the time your executor fulfills their role, that person should consider seeking help.
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Disclosure:
This material has been prepared for informational purposes only and should not be used as investment, tax, legal or accounting advice. All investing involves risk. Past performance is no guarantee of future results. Diversification does not ensure a profit or guarantee against a loss. You should consult your own tax, legal and accounting advisors.
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