Retirement Weekly: Your friend asks you to be executor of their will — should you do it?

A friend asks you to serve as executor of their will. It’s an honor. But it’s also a heavy lift.

In the moment, you might reply, “Of course I will,” without realizing it involves many hours of tedious and potentially rancorous work.

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If you were to pause and ponder the repercussions of saying yes, you might not agree so readily. Executors can get embroiled in paperwork, filing documents with state and federal government agencies. They also wind up paying tax bills and other debts (using money from the estate), making investment decisions to safeguard funds in the estate and possibly overseeing real-estate transactions.

After all that, they can still face legal liability if aggrieved family members or other heirs lash out. Brewing tensions can erupt into open conflict, especially with a large inheritance at stake and a dysfunctional family squabbling over it.

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“It can be a big job,” said David Handler, a Chicago-based estate planning attorney and partner at Kirkland & Ellis. “Generally, it’s not a job anyone is seeking.”

He suggests that you ask a few questions before you take it on.

Start by asking, “What does your will say?” and “Are there any surprises I would need to deal with?” For example, you want to know if your friend is not splitting up the assets equally among all the children—or omitting one of them entirely.

It also can’t hurt to ask, “Can I talk with your lawyer to see what being an executor entails?” It’s reasonable to want to know what you’re getting yourself into before you agree.

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While you don’t have to be a financial whiz to serve as executor, you do need to possess a basic level of investment knowledge so that you make prudent decisions. Keep in mind that you’re acting as a fiduciary, which means you have a responsibility to act in the heirs’ best interest.

“Anytime you step into a fiduciary role, it exposes you to legal liability,” Handler said. “And beneficiaries can always sue you even if you do everything right.”

He adds that wills often include clauses that limit an executor’s liability. But you should still consider the family dynamics—and the trust and respect you’ve hopefully developed with the adult children and other key players—before you agree.

The complexity of the estate can affect your decision to accept the job. If your friend has amassed considerable wealth—and a wide range of assets—spread across many accounts, that’s going to require more time and legwork. If you live in a different state, you will probably need to travel to your friend’s location at least once.

“Some states place extra requirements on out-of-state executors,” said Jennie Lin, an attorney at Nolo and editor of The Executor’s Guide. “So if you’re asked to be the executor and you’re not close by, state law sometimes imposes additional requirements and restrictions.”

Executors often get paid for their work. The amount varies; some wills specify an amount. And state law might stipulate a percentage of assets in the estate that goes to the executor.

Even if you initially agree to be an executor, it’s not a binding commitment. You can change your mind when the time comes. Perhaps your life circumstances have changed or you face health issues.

“An attorney handling the estate or a family member will call you [after your friend’s death] and say, ‘You’re executor,’” Handler said. “Usually, you need to sign a declaration to show the probate court” that you decline.

If you never agreed to be executor or your friend never asked you in the first place, the surprising news can leave you reeling. Torn by conflicting emotions, you may dive in without a clear sense of what you’re supposed to do.

“It it’s a close friend, you may find it therapeutic to serve as executor,” Lin said. “But it can take a decent amount of time.”

Transferring property in the estate can take six to 18 months until you distribute it to the new owners, Lin says. Meanwhile, you will need to secure the house, maintain the grounds and pay homeowners insurance.

You will also need to round up all your friend’s accounts with various financial institutions and take reasonable steps to avoid steep losses in those accounts before the funds get disbursed to beneficiaries.

“When you’re asked to be executor, it’s good to find out how organized they are and how much advance planning they’re doing,” Lin said. The tidier their record-keeping and filing system, the easier it will make your job—if you choose to accept it.

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