U.S. Supreme Court Justice Warren Burger is famous for more than just his time on the bench. When he died in 1995, he left a 176-word will that gave no specific power to his executors. As a result, he reportedly cost his estate tens of thousands of dollars in attorney’s fees.
Judge Burger’s case shows that even law-savvy individuals can make mistakes when it comes to writing their own legal documents. But giving executors the proper power is only one piece of the puzzle. How do you choose an executor? Can anyone do it?
What makes an individual a good choice?
Choosing an Executor For Your Will
Many people choose a spouse, sibling, child, or close friend as executor. In most cases, the job is fairly straightforward. Still, you might give special consideration to someone who is well organized and capable of handling financial matters. Someone who is respected by your heirs and a good communicator also may help make the process run smoothly.
Above all, an executor should be someone trustworthy, since this person will have a legal responsibility to manage your money, pay your debts (including taxes), and distribute your assets to your beneficiaries as outlined in your will.
When do you consider hiring a professional to be your executor?
If your estate is large or you anticipate a significant amount of court time for your executor, you might think of naming a bank, lawyer, or financial professional. These individuals will typically charge a fee, which would be paid by the estate. In some families, singling out one child or sibling as executor could be construed as favoritism, so naming an outside party may be a good alternative.
Proximity
Whenever possible, choose an executor who lives near you. Court appearances, property issues, even checking mail can be simplified by proximity. Also, some states place additional restrictions on executors who live out of state, so check the laws where you live.
Keep Your Executor Informed
Whomever you choose, discuss your decision with that person. Make sure the individual understands and accepts the obligation, and is made aware of where you keep important records.
Have Alternatives
Because the person may pre-decease you – or have a change of heart about executing your wishes – it’s always a good idea to name one or two alternative executors.
Where’s the Will?
It's a lot to leave up to the law but 68% of Americans do just that - including celebrities. Here are 10 famous people who died without having a will in place.
Jimi Hendrix - one of the greatest guitar players of all time: The famed guitarist's siblings had been feuding since 2002, when their father, Al Hendrix, died and left Jimi's sister Janie in control of the musician's $80-million estate.
Bob Marley - Jamaican singer/songwriter: After a 10 year legal battle that added up to $6 million, the Jamaican court ordered that control of Marley's estate remain with Chris Blackwell. Then in 2001, the estate passed to his widow and 10 children.
Salvatore Phillip "Sonny" Bono - entertainer turned U.S. Congressman: His wife, Mary Bono, had to go through probate court to become the executor of her husband's estate, and Cher sued the estate for unpaid alimony.
Pablo Picasso - famous artist: Dividing his assets took six years of contentious negotiations between his kids and other heirs.
Howard Hughes - entrepreneur and billionaire: After several angry lawsuits, a judge finally declared that Howard died without a valid will and therefore split his fortune up among 22 cousins.
Abraham Lincoln - lawyers and the sixteenth president of the United States: His estate was eventually settled two and a half years after his death, divided equally between his widow and two children.
Martin Luther King, Jr. - civil rights leader and activist: After his death, his heirs formed a corporation to manage King’s estate, but then they fought over control of the corporation.
Barry White - soulful entertainer: Upon his death, he left behind an outdated will that left 2 ex-wives, a long-term partner, and nine children unprotected.
Stieg Larsson - Swedish author of The Girl with a Dragon Tattoo: When Stieg Larsson died intestate, his life partner, Eva Gabrielsson, who shared Stieg’s life for 32 years, was left out in the cold. Larsson’s father and brother inherited his entire estate, which includes the rights to his best-selling trilogy.
Prince - multi-talented artist: While the estate passed to six family members, In the years following Prince's death, there was a furious debate over the value of Prince's estate between the estate's administrator and the IRS.
What all these individuals have in common is that their wishes were unknown and it was left to the courts to decide what is to happen to their assets. In many cases, hard feelings and discontentment marred relationships between family members. And, oftentimes, individuals the deceased loved were left with nothing.
The period following the death of a loved one is a stressful time and can be confusing for family members. Choosing the right executor can help ensure that the distribution of your assets may be done efficiently and with as little upheaval as possible.
Final thought.
Has it been more than 5 years since you updated your estate plan? Would you like to bulletproof your wealth for the next generation? If you have more than $2 million saved and need help from a wealth manager, the Peak Wealth Planning team can assist.
- - - - - - - - - - - - - - -
About the Author
Peter Newman is a Chartered Financial Advisor (CFA) and president of Peak Wealth Planning. He works with individuals nationwide that have accumulated wealth through company stock, ESOP shares, real estate, or running a business. Peter applies his unique background to help clients achieve their specific goals and enjoy peace of mind.
Peak Wealth Planning offers personalized concierge services to meet your wealth management needs, including financial planning, investment management, ESOP diversification, retirement income, insurance, and estate planning. As a fee-based financial advisor based in Chicago, Peak Wealth Planning serves a select group of clients in Illinois and across other states.
Comments