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executor

Thursday’s need-to-know money news

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Today’s top story: Why you may not want to be an executor. Also in the news: 5 ways to foil catalytic converter thieves, 3 money habits to carry forward from the pandemic era, and how to avoid fees when paying your taxes.

Why You May Not Want to Be an Executor
Settling someone’s estate can be time-consuming and difficult, plus you could be sued.

5 Ways to Foil Catalytic Converter Thieves
Catalytic converter thefts have soared during the pandemic.

3 Money Habits to Carry Forward From the Pandemic Era
According to a new survey, 78% of Americans report that the pandemic spurred them to take financial action.

How to Avoid Fees When Paying Your Taxes
Some options are better and cheaper than others.

Why you don’t want to be an executor

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Being asked to be an executor is an honor you might want to pass up.

Settling an estate typically involves tracking down and appraising assets, paying bills and creditors, filing final tax returns and distributing whatever’s left to the heirs. At best, the process is time-consuming. At worst, it takes hundreds of hours, exposes you to lawsuits and thrusts you into the middle of family fights.

Robert Braglia of New York, a certified financial planner, was executor of an estate where the woman disowned three of her four children and left most of her money to just one of her many grandchildren. That could have caused an uproar even if the family got along, which it didn’t: Two of the woman’s children were fighting over the woman’s ashes before she actually died.

“Even without conflicts — which there always are — it is an enormous job,” Braglia says.

In my latest for the Associated Press, why it’s important be clear on what’s involved before you agree to take on this role.

Q&A: Picking your estate’s executor

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Dear Liz: One issue in a recent column was about a sibling who did not follow the will. As executor, the sibling took two thirds of the estate instead of the will’s specification of half.

This is why, when my wife and I had our estate plan created, we told the attorney that none of the beneficiaries should be the executor of our wills and none should be a trustee of our trusts. Indeed, our trusts — which own almost our entire estate — cannot have the spouse, child, parent or in-law of a beneficiary as a trustee.

Answer: Yours is certainly one solution, if you can find the appropriate people to serve. But naming an heir as executor or trustee doesn’t have to be a disaster, as long as you name the right person — someone who is honest, dependable and able to serve with integrity.

Q&A: What to consider before becoming an estate executor

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Dear Liz: A lifelong friend has made me executor of his will. He has one brother who is named in the will only to be told that he is not included. My friend’s estate is left to two other lifelong friends. If his brother protests the will, what are my duties or liabilities? Can I be pulled into court at my own expense and time? Should I tell my friend that I don’t want the role?

Answer: Being an executor can be a huge hassle, but it’s also an honor and a way to offer a final, loving gesture to your friend. Learn as much as you can about the situation before deciding whether to refuse.

If the brother does contest the will, typically your friend’s estate will pay the legal fees and other expenses. Executors also can be compensated, with the amount determined by the will. If there’s no mention of a fee in the will, state law determines how much the executor can be paid. The fee would be taxable income to the executor. It’s certainly worth discussing the potential costs and fees with your friend before you decide whether to take on this role.

Family members and friends often waive the executor’s fee as a gesture of goodwill, but there’s no requirement to do so. The job typically requires considerable time and effort, even when unhappy relatives aren’t threatening lawsuits. Also, executors can be held legally and financially liable for mistakes. If you do take on this role, consider hiring an attorney to guide you through the process. The attorney’s fees also can be paid by the estate.