08 Jul How can I choose an executor for my estate when I’m dead?

Q. I need to make a will and I’m not sure who to designate as the executor. I really would like my bank, but the money is under $50,000 I doubt they will do it. I hate to ask my children. It would be too much for them.
— Planning ahead

A. Choosing an executor is a very important decision.

When selecting an executor, it is important to consider the role of the executor in administering your estate.

“The executor is the person that marshals your assets, pays your creditors and ultimately makes distributions to your beneficiaries,” said Catherine Romania, an estate planning attorney with Witman Stadtmauer in Florham Park. “Depending on the size of and assets comprising your estate and your estate plan, the executor may have to make many important decisions including, for example, sale of assets, tax elections, and how to fund beneficiary bequests.”

Romania said the executor is permitted to retain professionals to assist him or her in administering your estate and making any necessary decisions and to pay these professionals from the estate.

Executors are also entitled by New Jersey statute to a fee calculated as 6% of income received by the fiduciary on behalf of the estate, and 5% of the first $200,000 of principal received by the fiduciary on behalf of the estate, with 3.5% on the excess over $200,000 up to $1 million and 1% over $1 million, she said.

An additional 1% fee is allowed for multiple fiduciaries, she said.

“Fee agreements can be signed in advance allowing fiduciaries greater fees which is generally the case with financial institutions,” she said. “Courts also have the power to either reduce or increase fees based on the circumstances.”

Romania recommends you discuss with your children the burdens of acting as an executor versus the expense of hiring a professional fiduciary before making any decision.

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This story was originally published on July 8, 2020.

NJMoneyHelp.com presents certain general financial planning principles and advice, but should never be viewed as a substitute for obtaining advice from a personal professional advisor who understands your unique individual circumstances.