TH E
Blitz
CHOOSING the Right EXECUTOR (Your heirs may love you for it!) I was visiting Brother Tom, who is a resident at the Masonic Village at Dallas, the other day to go over his estate plan with him. He is widowed without children, but has several nieces and nephews he wants to remember in his will, along with the Masonic Villages. We talked about the usual issues regarding the most tax efficient manner to leave his estate to charity and his heirs, but his main concern was who to select as his executor. Tom exclaimed, “AI, I just can’t figure out who is the best person to handle my estate. I was thinking I should select the person closest to where I live and leave it at that. What do you think?” My response to Tom was rather pointed. “Tom,” I said, “keep your friends close and your executor choice closer.” Tom looked at me with bewilderment. He retorted, “What do you mean, Al? Please explain yourself.” By now, you all know what comes next with my stories. I summarize what I told Tom and, hopefully, you are a little wiser on the topic. I told Tom that your executor is the last chance you get to make sure your worldly possessions are properly disposed of, so the decision should not be taken lightly. The executor’s job is to marshal your assets, pay any taxes or debts due and dispose of your estate in the manner provided in your will. In Pennsylvania, the executor has the duty to pay an inheritance tax and file an inheritance tax return. If a charity is named in the will, the executor should file an account of the estate with the PA Attorney General for approval. No small tasks for even a sophisticated person. Consequently, the competency of the person selected is critical to success. BUT, there are some caveats here.
JUNE 2022
Information on Tax and Estate Planning from the Masonic Charities of the Grand Lodge of Pennsylvania
First, competency does not mean the person has the desire or time to be executor. I have personally found myself in this position, where I was picked as executor by a friend who owned a home far from me. The estate work was overwhelming, and I had little time to spare. Thankfully, I was able to hire a professional to assist me in cleaning and selling the home and gathering the personal property. Otherwise, I probably would have refused to serve. Then, there is the question of fees for the executor and the attorney for the estate. Executor fees are usually based on a percentage of the estate. For the attorney, the fee can be based on a percentage or an hourly rate. The hourly rate is more commonly used today, especially with larger estates where the percentage amount can greatly exceed the amount paid for the work done. The executor is free to decide which way to go. I would suggest having this discussion with your chosen executor now rather than later, for obvious reasons. Finally, I believe the most important decision in settling an estate is selecting counsel. Ideally, after you select your executor, you should introduce him or her to the attorney you would like to handle your estate. It is also helpful to select an attorney in the county where you reside, since in Pennsylvania (and most other jurisdictions), an estate is filed at the county courthouse where the decedent resided. A local attorney familiar with the local courts and professionals to help settle an estate in that area can make the estate administration process much less burdensome on the executor. If you have moved to a new residence lately, I highly recommend seeking out local counsel to prepare your estate plan. Your executor and heirs will remember you fondly for it. Tom then commented that since he moved to Dallas from Media several years ago, he hasn’t updated his will or sought out a local attorney. He asked if I could recommend anyone. I showed him our list of recommended attorneys whom we work with. He selected an attorney in Kingston and a nephew, who was a retired Army Colonel, as his executor. If you would like a list of attorneys and other financial and estate planning professionals in your area, you may email me at ablitz@masonicvillages.org or call our office at 1-800-599-6454.