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Article written by Maria Ortiz.
The estate planning process is made up of many major decisions. Of these decisions, choosing an executor is among the most important.
This article highlights ten considerations to assist you in naming an executor of your estate in compliance with Texas law.
An executor is an individual or entity appointed to administer an individual's estate upon the individual’s death. The executor must distribute assets of the estate based on the provisions of the individual's will while handling other estate-related matters such as settling debts.
The first five points to consider are based on language found in the Texas Estates Code. Section 304.003 of the Texas Estates Code lists instances where an individual is disqualified from serving as an executor. If your prospective executor falls under one of the following categories, you should consider naming a different person to serve as executor.
1. A person cannot serve as an executor if the person is incapacitated.
The Texas Estates Code states that an individual cannot serve as an executor if the individual lacks capacity.
Under the Texas Estates Code, the term “incapacitated” refers to three categories of people: (1) minors; (2) adults that are unable to provide for their own food, clothing, or shelter, or lack the ability to maintain their physical health or manage financial affairs; and (3) an individual that is under the care of a guardian.
2. A person cannot serve as an executor if the person has a felony conviction on record.
An individual cannot serve as an executor if the individual has been convicted of a felony. An executor must complete his or her responsibilities in a fiduciary capacity, and Texas laws seek to avoid situations where an executor may forego these duties and instead wrongfully act in the executor’s personal interest. For this reason, individuals with felony convictions cannot serve as executors.
If you suspect that this law may prevent your proposed executor from assuming the executor role, consider naming a different person to serve.
3. A person cannot serve as an executor if the person is not a resident of Texas and has not named a resident agent.
Texas law requires the named executor to live in Texas. Alternatively, if the executor does not live in Texas, the non-resident executor must name a resident agent.
An executor must be accessible to beneficiaries and creditors throughout the probate process. However, beneficiaries and creditors may have a difficult time contacting an executor if the executor does not have a presence in Texas.
To ensure that creditors and beneficiaries can contact the named executor, Texas requires an out-of-state executor to designate a resident agent who is responsible for receiving correspondence and other notices.
4. A corporation that is not authorized to act as a fiduciary cannot serve as an executor.
This requirement restricts the type of institution that may serve as executor of an estate. An institution is prohibited from serving as an executor unless the institution is authorized to act in a fiduciary capacity, meaning that the institution is authorized to act on behalf of an individual. An institution acting in a fiduciary capacity is required to put the interests of the individual ahead of the institution’s interests.
Banks and financial institutions are sometimes named to serve as executors. Be mindful of any associated fees that the institution may charge for serving in this role.
5. A person cannot serve as an executor if the court finds that the person is unsuitable to serve as an executor.
A court always has discretion to decide whether an individual is suitable to serve as an executor. If a court finds that an individual is unsuitable to serve as an executor, the court will rule that the individual is prohibited from assuming the executor role.
In addition to the five prior legal considerations, there are at least five additional practical considerations to think about before naming the executor of your estate.
1. You should trust your executor to follow the instructions left in your will.
An executor's role is to abide by the contents of a will. Failure to do so could entitle a beneficiary to file a breach of duty claim.
Probate litigation is costly and only creates a further delay in the resolution of an estate. Therefore, to avoid the potential for litigation or other similar disruptions, be sure to name an executor whom you trust to follow the provisions of your will.
2. Your executor should be responsible.
In addition to abiding by the provisions of a will, an executor must meet deadlines related to probating the will. For this reason, you should choose an executor whom you believe to be responsible.
On top of meeting deadlines, an executor is commonly tasked with overseeing the transfer of assets, such as real property. Because these types of transfers are sometimes complex, be sure to appoint an executor who is capable of handling such transfers.
3. Consider appointing an executor that is familiar with your assets.
While this is not required, you should consider whether your prospective executor is familiar with the assets that make up your estate.
During the process of probating a will, an executor must prepare an inventory of the deceased person's estate. While not impossible, this task becomes more complicated if the executor lacks general knowledge of an estate's assets.
To limit issues at the inventory stage, consider naming an executor who has a general idea of the assets that make up your estate.
4. Determine whether your potential executor is willing to serve as executor.
Before making a final decision, consider asking your prospective executor whether he or she is willing to serve as executor. The role of executor comes with many responsibilities, which can seem overwhelming. A named executor is not required to serve as executor and can refuse to serve as executor upon a testator's death. This could cause a delay in probating a will.
To avoid these issues, speak with your prospective executor and confirm that he or she is willing to assume the role.
5. Consider naming alternate executors.
In addition to confirming with your executor that he or she is willing to assume the executor role, consider speaking to others who might be willing to serve as alternate executors.
Even if an individual agrees to serve as executor at the time in which you create your will, the individual might change his or her mind. Or the prospective executor might suffer an accident rendering them unable to serve as executor.
For this reason, it is wise to choose at least one alternate executor who would be willing to serve if your primary executor is unable to do so.
Prepare your estate plan today.
These ten considerations will put you on the right track for choosing an executor to oversee your estate. Lyda Law Firm is ready to assist you throughout your estate planning journey.
If you need assistance to prepare or update your estate plan, contact us so we can assist you in planning for your future.
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