Have a Back-Up Plan

Don't name just your spouse or one adult child as executor. Instead, pick two executors, one a family member and the other a trusted financial advisor, bank trust department or estate-planning lawyer. This way, your estate benefits from the input of someone who intimately knows your family and from a professional who is very familiar with the estate administration process.

Being an executor can be a time-consuming job, and all states allow for executors to be paid a commission. In some states, these commissions are set by statute and are expressed as a percentage of your estates assets. Other states set commissions based upon a reasonable hourly rate for time spent handling the estate. What's reasonable?

Expect your executors' fees to equal between 3% and 5% of your estate.

Dolan Smart Money Move: Before naming a bank as your executor, be sure you're comfortable with the bank's trust department. These are the people who would administer your assets. In particular, examine the bank's fee schedule and track record. Fees shouldn't be more than 5% of your estates asset, and the trust assets they administer should have a long-term record of earning 8%-10% annually.

Once you've decided who you want to be your executor, your next step is to ask the potential executor if he or she will accept these responsibilities upon your death. Even so, we recommend that you name a "successor" executor just in case your first choice suddenly becomes unwilling or unable to carry out his or her duties.

In addition to naming your executor, you should also decide whom you want to act as guardian for your minor children or as trustee of any trusts created under your will.

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