5. Can you afford to be an executor of estate?
If you live in another state, will you need to travel to the person’s hometown, and if so, how often? Will the estate cover travel expenses?
Crim made repeated trips from her home in Alexandria, Va., to her late parents’ place in Saline, Mich., to deal with paperwork and other tasks. “I fax things all over the country, but I do sometimes have to sign papers and fill out forms with lawyers and financial professionals in Michigan,” she says. The estate will pay for those travel costs. It would be an expensive proposition otherwise, Crim says.
What about the value of your time? Will you be expected to do this work for free? In most states, executors are entitled to take a percentage of the estate's value, even if a fee wasn't specified in a will. But with those legal guidelines, it's still common for executor fees to become a source of conflict with heirs. Some family members may view the money as their own or be unaware of the time you've invested.
Elizabeth Haase, a Washington, D.C., psychologist, says administering a friend's estate was like a second job. Yet at least one extended relative balked at her taking the fee specified in the will — 2 percent of the estate's value. She wanted to honor her friend's dying wishes by being executor but felt guilty about accepting payment. In the end, it was so much work that she took the fee. It hardly seemed like a windfall. "Nobody does it for the money," Haase says.
The Estate-Planning Checklist
Who hasn't heard tales of relatives fighting over bank accounts, siblings no longer speaking to one another, or loving relationships severed for good as estates are settled and assets distributed? You can help head off those dramas in your own family by putting your financial affairs in order now.
1. Make a list: Write down all the numbers for your credit cards, bank accounts, passwords, retirement and investment accounts, life insurance policies, tax records, safe-deposit boxes and real estate. Include the names and contacts of any lawyers and financial experts you've used. Keep the list updated and tell your executor where it's located.
2. Be specific. Create a will or trust that clearly specifies your wishes. Do you want your granddaughter to inherit your diamond wedding ring and your grandson to have your car? Put that on a separate list and attach it to your will.
3. Talk openly. If you appoint one sibling as executor, tell the others why you made that decision. Perhaps it's because the designated child is the eldest, or lives close by, which will make the process easier.
4. Be clear on fees. Realize that asking someone to be an executor is more than a favor. It's a very demanding job. Consider specifying that a fee will be paid, and how much. Explain to everyone else why.
Carole Fleck is a writer and editor for AARP Media.