We love what we do.
I’m not sure if it’s always obvious, but perhaps you can take a cue from the fact that I take the time to post you these sorts of notes on a regular basis, if not by other factors.
We love this stuff, and consequently, we work hard for our Louisville clients.
Crafting elegant, tax-saving and easy-to-understand strategies to help you save on your taxes is a joy. And, of course, removing from our clients the annoying hassle of dealing closely with government paperwork, deadlines and personnel — while not exactly a “joy” — provides us with great satisfaction because we know that we get to serve our clients and help them not have to deal with stuff that isn’t exactly “fun”.
But sometimes (usually a rare instance), there are circumstances in which, despite great planning and implementation of strategy, things go sideways.
That is REALLY not fun.
A couple weeks ago, I wrote about estate planning, and I do want to touch on it one more time here today — despite the fact that it isn’t our primary area of service. It’s such a critical part of a family’s financial picture, but it doesn’t really get focused on, occasionally only until it’s too late.
You see, even the most well-crafted estate plan can be ruined by a poor choice of executor.
Of course, we can always do our best to help our Louisville clients and and their families deal with it and navigate through this poor choice, once it becomes apparent — we have definitely handled that sort of thing.
But it’s always better if the choice is made well.
So, this week, I have some words about this, as you consider your current executor, and whether they fit the profile …
And by the way, this is just as important for the single person as it is for those who have families to think about.
Kevin Roberts’ Guide For Choosing An Executor Of Your Estate Plan
“Many receive advice, only the wise profit from it.” – Harper Lee
Whenever you have any kind of estate plan in place, your executor is the person who manages the process when it is actually “executed”. They are what is called a “fiduciary”, which means he or she must be someone who will act in good faith when handling your affairs. He or she cannot take advantage of his or her position, or unfairly profit from financial transactions from your estate. The executor will meet the standard of a fiduciary duty if he or she does a competent, honest job.
You want your fiduciary to be both trustworthy and capable of handling the tasks. You have to have complete faith in him or her. Make sure he or she understands the responsibility of the job and is willing to accept it. This obviously should require a discussion before you make your Will.
Oh, and if you make NO plan, the state will be the one who chooses your executor through a process called probate.
It sounds a bit strange, but name someone who is healthy and likely to be around after your death. To be secure, you should definitely select at least one successor executor to serve if your first choice is unable or unwilling to do so when the time comes.
For many people, the choice is obvious — their spouse. Others select a close friend, a grown child or other close relative. If no obvious person comes to mind, make a list of your possible selections and use common sense (and this article as your guide) to make the wisest choice.
Remember, as I wrote last week …
An executor must:
* Locate Will beneficiaries
* Examine and inventory your safe deposit boxes
* Collect your mail
* Cancel credit cards and subscriptions
* Notify the SSA and other benefit plan administrators of your death
* Learn about your property, which may involve examining bank statements, deeds, insurance policies, tax returns and other records
* Get bank accounts covered by the Will released
* Place notices in newspapers so creditors can make claims
* Hire a probate attorney
Either the executor or the probate attorney must:
* Manage your assets during the probate process, which usually takes six months to a year
* Handle court-supervised probate matters, including transfer of property to your beneficiaries and making sure your final debts and taxes are paid
* Have final income tax forms prepared, and, if necessary, have estate tax returns for your estate prepared and filed
So the choice is important when it comes to choosing an executor.
But lastly, as you make these decisions, consider telling your family and loved ones exactly what you plan.
This gives you the chance to head off any possible disagreements among your family about how things “should” be handled. If you happen to die or lose capacity, it’s usually too late.
Eliminate surprises and keep those family fights at bay.
Perhaps the LAST thing to say is: make sure you have competent help by your side, in ALL things financial (especially when it comes to your existing finances and tax strategy).
And that, of course, is what we’re here for.
Until the next time I write to you (which will be soon), I am warmly yours,
Roberts CPA Group