Recently, I wrote about serving as an Executor or Trustee in someone's estate plan and how to graciously say “no”. Now, I would like to review who you would ask to fulfill these vital roles in the event of your incapacitation or death.
As you know, the person you choose to be your executor (sometimes called a personal representative) will play an extremely important role. That person will be responsible for gathering, securing, managing, and ultimately distributing your money and property when you pass away. As a result, you should make your selection only after careful consideration regarding who is the best person to fulfill this role. Don't just choose your oldest child because that's what you think is expected! Be honest with yourself about the strengths and weaknesses of the people you are considering. If a friend or advisor is more trustworthy or better qualified, that person may be a better choice. The probate court will typically honor your choice, but there are certain circumstances that could legally disqualify the person you have nominated as executor. If the executor you have nominated is legally disqualified, the court will not appoint that person as executor.
Characteristics Not Legally Required
There are several factors to consider before choosing your executor that are not addressed in state law. For example, if the person you have chosen is extremely busy, he or she may not have time to serve even if that person would otherwise be a good choice. Similarly, someone who does not live close by may find it difficult to make the necessary trips to take care of your money and property. It is also prudent to name someone who is reliable and trustworthy, although these characteristics are not legally mandated.
Legal Qualifications to Be Executor
There are certain categories of people who are disqualified from serving as an executor under the law of most states. For example, your executor typically may not be someone who:
- has not reached the age of majority (in Illinois, that is 18 but some states are 21);
- has a felony conviction;
- is not a U.S. resident; and
- has been found to be incapacitated (physically or mentally unable to manage their own affairs) by a court.
These rules may vary to some degree. For example, in Oregon, those who have been nominated to serve as an executor must disclose any felony convictions to the court, but they are not automatically disqualified. Rather, the court will only disqualify them if the conviction or other evidence shows “unfaithfulness and neglect” and the court determines your choice is likely to mismanage your estate (see Or. Rev. Stat. § 113.092).
Many states have other more unique restrictions. North Carolina law prohibits the appointment of an executor who is found “illiterate” or “otherwise unsuitable” by the clerk of superior court (see N.C. Gen. Stat. § 28A-4-2). In addition, North Carolina court will not appoint your divorced or separate spouse or a spouse who knowingly contracts a bigamous marriage (see N.C. Gen. Stat. § 31A-1), and fortunately, a person convicted of your murder is also ineligible (see N.C. Gen. Stat. § 31A-4). In Nevada, a probate court will disqualify a nominated executor because of “conflict of interest, drunkenness, improvidence, or lack of integrity or understanding” (see Nev. Rev. Stat. Ann. § 138.020). An Oregon attorney who has been suspended, disbarred, or who has resigned from the bar during a pending investigation or disciplinary proceedings may also be disqualified as serving as executor (see Or. Rev. Stat § 113.095).
Special Rules for Out-of-State Executors
Out-of-state executors normally are not disqualified, but they may have extra requirements that must be met. For example, in Florida, a nonresident cannot be a personal representative unless the person is related to the deceased person or the spouse of a person who is qualified under the statute (see Fla. Stat. § 733.304). Further, many states require an out-of-state executor to find an in-state resident to serve as his or her agent or to deal with certain probate matters (see e.g., Ark. Code Ann. § 28-48-101; Texas Prob. Code Ann. § 78; Vt. Stat. Ann. Tit. 14, § 904).
Situations When Bond May Be Required
An out-of-state executor may also have to obtain a probate bond (see 755 Ill. Comp. Stat. § 5/6-13), although some states' laws (though not all) allow you to waive the bond in your will (see Wash. Rev. Code Ann. § 11.28.185). The probate court may also require an executor to post bond in other situations to protect the interests of the estate by providing insurance against the risk that the executor will steal or mismanage estate property, which obviously would be detrimental to the beneficiaries. If this is required under state law, the executor will have to submit an application for the bond, which is similar to an application for a loan from a bank. A credit check is typically required, and if the executor does not have good credit, has filed for bankruptcy at some point, is retired, or is very young, it may be difficult or even impossible for the executor to obtain a bond. If a bond is required, it typically must remain in effect until the probate process is concluded or the estate is settled.
Because of these potential difficulties, many people include provisions in their will waiving the executor's obligation to obtain a bond. Even if the will does not contain a waiver, the executor may be able to ask the beneficiaries of the will to sign written waivers which can then be submitted to the probate court along with a petition requesting that the bond be waived.
Let Us Help
If you are wondering who to appoint as the executor of your estate, we can help you identify the important factors to consider in making this important decision. The law in Illinois has its own particular requirements, so we can also help you rest assured that the executor you choose will not be legally disqualified. Please call us today to discuss this or any other estate planning needs or concerns. We are happy to meet with you over the phone or by video conference, if you prefer.