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Naming Your Executor
You should name an executor in your will. In order to decide who is best to carry out this position, you need to know what responsibilities the position has.
The executor’s job is to start the probate process with the court, gather all of your assets, pay your debts, last expenses, and taxes, and distribute whatever is left over to the persons named in your will. Additionally, your executor will notify Social Security, pension providers, insurers, financial institutions, and other entities of your death. If you have antiques or valuable collections (coins, stamps, collectibles), your executor will need to hire an appraiser to get a value for these items. If anyone owes you money, the executor must collect that debt. At the end of the distribution, the executor must be able to give an accounting to all of your beneficiaries that your wishes, as expressed in your will, were carried out.
The executor owes fiduciary duties to anyone who has an interest in the estate, and the executor must act in the best interests of the estate. For example, if an executor mismanages the estate assets, he or she can be held personally liable and may have to repay the estate for any losses.
The executor for a New Jersey estate is entitled to a fee for services performed. Under New Jersey law, the executor of an estate is generally entitled to the following commissions:
6% on all estate income;
5% of the estate up to $200,000;
3.5% on excess above $200,000 up to $1,000,000;
2% on excess over $1,000,000 or such other percentage as the Superior Court may determine.
There are different rules for commissions when there is more than one executor, or when the executor has rendered unusual or extraordinary services. In some cases family members may choose not to accept (waive) fees. However, a decision to waive fees should be made only after the legal (who will get the money) and tax (what is the cost of the lost deduction) issues are considered.