Pete the Planner: Here’s what you need to know about executing an estate

A dear friend came to me last week with an unexpectedly expected conundrum: Should he serve as the executor of his father’s estate? At first blush, you would think it’s a resounding, “Of course!” But the reality is much more complicated than that. The risk of messing up his father’s wishes is too great, so we combed through the various considerations together.

Admittedly, some of these factors are nearly impossible to self-evaluate. For instance, who is going to disqualify his or herself for a lack of integrity?

First up, legal capacity. If you can distinguish between your Aunt Sally’s will and a grocery list, congratulations, you’ve passed the sanity check! No seriously, if for some reason you’re not of right mind, then do not proceed.

Now, onto trustworthiness and integrity—the Batman and Robin of executorship. Imagine yourself as the superhero of probate court, cape billowing in the wind as you swoop in to uphold the deceased’s wishes with unyielding integrity. If for some reason you don’t trust yourself to act with integrity, disqualify yourself. If you happen to be paired with a co-executor and you don’t trust that person’s level of integrity, stay opted in.

Organizational and administrative skills emerge as the unsung heroes of executorship. Picture a whirlwind of paperwork, legal documents and financial statements cascading upon you. As an executor, adeptness in managing these administrative tasks—from inventorying assets to paying debts and filing taxes—is paramount. The ability to maintain order amidst the chaos ensures a smooth transition of the estate’s affairs.

Time commitment looms large in the executor’s realm, demanding a dedicated investment of one’s most precious resource. Picture yourself juggling myriad responsibilities—from attending court hearings to meeting with lawyers and beneficiaries. The journey of executorship is not a sprint but a marathon, necessitating unwavering commitment to see the process through to its completion. If you are exceptionally bad at managing time, consider opting out. Availability emerges as the currency of executorship, demanding a generous investment of one’s time and energy. Picture a relentless cascade of demands—from legal proceedings to administrative tasks—requiring your unwavering presence. The journey of executorship unfolds not on your timetable but in accordance with the demands of the estate.

Financial literacy emerges as a beacon guiding the executor through the labyrinthine terrain of estate management. Imagine navigating investment decisions, asset valuation and tax obligations without a compass. Executors must possess a fundamental understanding of financial principles to navigate these murky waters with confidence and prudence. If you’re a 5 or below on a 10-point financial literacy scale, think twice about saying yes to this task.

Additionally, knowledge of legal and tax matters serves as the compass guiding the executor through the legal labyrinth of estate administration. Imagine navigating probate proceedings, tax obligations and regulatory requirements without a roadmap. Executors must possess a foundational understanding of legal and tax principles to navigate these treacherous waters with confidence and precision.

Conflict resolution skills stand as the arbiter between harmony and discord in the executor’s domain. Picture disputes among beneficiaries, challenges to the will and familial tensions bubbling to the surface. As the mediator-in-chief, the executor must navigate these turbulent waters with tact and diplomacy, striving to achieve equitable resolutions amidst competing interests. One thing is for certain, this process will not be fun, and in many instances, getting people on the same page is the hardest part.

Relationship with the deceased and beneficiaries serves as the bedrock upon which executorship is built, demanding a delicate balance of empathy and impartiality. Picture yourself entrusted with executing the final wishes of a loved one, navigating the delicate terrain of familial dynamics. As the custodian of the deceased’s legacy, the executor must honor their wishes with steadfast resolve, while navigating the complexities of familial relationships with grace and compassion.

And finally, and probably most importantly, a prudent executor has a willingness to seek professional advice—acknowledging the limits of one’s expertise and embracing the wisdom of seasoned professionals. Picture yourself at a crossroads, grappling with complex legal or financial decisions. In such moments, the executor must humble his or herself, seeking the counsel of legal experts, accountants or financial advisers to navigate the intricacies of estate administration.

The journey of executorship is a multifaceted odyssey, demanding a blend of financial acumen, organizational prowess, and emotional intelligence. As we navigate the intricacies of estate administration, let us heed the lessons of the past, embracing the responsibilities of executorship with humility and grace. In the stewardship of the deceased’s legacy lies not only a legal obligation but a sacred trust to honor their memory and uphold their wishes with unwavering integrity.•

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Dunn is CEO of Your Money Line powered by Pete the Planner, an employee-benefit organization focused on solving employees’ financial challenges. Email your financial questions to askpete@petetheplanner.com.