Choosing a Personal Representative

Whether they’re called Personal Representatives (P.R. for short), Executors or Administrators, they all have the same purpose – to manage your assets, file proper documentation with the courts and IRS, deal with any creditors you may have had and properly distribute your assets to your heirs. It’s not an easy job and it will be best for everyone if you give some thought today into who would be the best person to handle this for you after you are gone.

Here are some considerations I discuss with all of our estate planning clients before they make this choice.

Age – When naming a P.R., try to name someone younger than yourself. Most people don’t update their wills regularly and statistically, if you name someone older than yourself (a parent, older sibling, etc.) they will have already passed away. There are plenty of exceptions to this “rule” when people want to name a spouse or when they have an illness that realistically will bring about their death before those that are older than they are. If you do choose someone older than you, ensure that your alternate (second choice) is younger and be prepared to update your document if they pass away or become incapacitated.

Location – It is not necessary that the person you choose to live in the same city or state that you do; however, if you have good options close to home it will make their life easier. Being someone’s P.R. will require the person to collect and manage all of your assets (most of which will be where you lived) and can require several trips to the court as well. Personal Representatives who must travel repeatedly usually end up with high travel expenses, missed days from work, and delays from the inability to be nearby when needed.

Financial Stability – If someone can’t manage their own finances, why would you ask them to manage yours? Choosing a P.R. means entrusting someone with full access to your bank accounts, investments, personal property and more. For this reason, you need to ensure the person you choose is financially responsible and trustworthy. This is a lot of power to give someone and putting that power in the wrong hands can have disastrous consequences for your heirs. If you don’t have anyone in your life that is trustworthy, this may be the time to think about using a professional P.R. (attorney, bank, etc.) or putting in your will that you want your P.R. to be bonded.

Relationship with your heirs – Don’t overlook that this person will be working for and with your heirs. If your brother and wife have never really gotten along, it would not be wise to name him as the P.R. when your primary heir is your wife. Instead of considering what type of relationship your potential P.R. has with YOU (which is irrelevant because you will be dead), think about what type of relationship they have with your heirs. Blended families, second marriages, and strained family relationships can make this a challenge.

In closing, after you have chosen your P.R. and an alternate, it’s a good idea to let the people know they have been named. Some will be honored and others may decline (especially if they have done it before).

Either way, you will have the chance to know their willingness and to discuss with them any problems you foresee with your estate. And remember, if you think choosing your own P.R. is a daunting task, imagine how the probate court feels if they have to make the choice for you after you’re gone.