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Wednesday, July 14, 2010

Should my parents be my executors?

The answer to the question of whether your parents should be your executors will partly depend on your age and your parents' ages. If you're 25 and your parents are about 50, then appointing them as your executors could work for the immediate future. The problem is though, that if you don't look at your Will again for many years, then you might suddenly realize that the choice you made back then is no longer as suitable.

As a general rule, you should not have an executor who is much older than you are. An entire generation older is problematic.

With an executor who is getting up there in years, you run a couple of risks. In the natural course of events, you should expect someone much older than you to pass away before you do. If your executor is a generation older than you, he or she could pass away while administering your estate. If this happens, then your executor's executor becomes yours. This might not even be someone you know.

The other risk is that the executor might lose mental capacity while administering your estate. This could lead to losses and delays while someone else sorts things out.

Most parents will not refuse to be an executor when one of their children asks them, because they feel the child needs them to fill this important role. But in my view, the children should consider the heavy load carried by an executor and think about whether it's really fair to ask that of a parent who is getting on in years.

Clients have told me that they've appointed their parents because they really didn't have anyone else in their lives at the time that they trusted to deal with their assets. If this is the case, consider using a trust company.

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