Considerations when selecting an executor or trustee of your estate
| January 28, 2024 1:00 AM
When I meet with clients to set up estate plans, I find that a surprising number of people mistakenly believe that they must name their eldest child in their will or their trust as the person in charge of their estate. Even those who understand that they are not legally required to do this may think they are supposed to nominate their eldest child for this duty. There may have been a time when social norms dictated this outcome, but those days are long past, and today I speak to my clients in detail about who the right type of person is to be left in charge of their estate. Let’s review some of the factors that should be considered.
Before we discuss those factors, let’s remind ourselves of which estate planning documents we are thinking when we are concerned with nominating someone to be in charge of your estate after your death. We are either thinking of a “Last Will and Testament” (“Will”), or a “Revocable Living Trust (“Trust”). A Will is a document used by you to state what should happen to your possessions and assets when you die, as well as who it is that should carry out those instructions you’ve left. The person you have placed in charge of your estate under a Will is called a “Personal Representative” or “Executor/Executrix.” That person will work under the supervision of the Probate Court Judge to administer your estate.
Not everyone has a Trust, but those who do are trying to avoid the need for their estate to go through a court-controlled process called “Probate.” If you are using a Trust, then you will make similar instructions in it to those made in a Will, but the person you leave in charge of the estate through a Trust is called your “Successor Trustee.” This Successor Trustee will have the same types of duties and responsibilities as an Executor under a Will but won’t need to go through the formal court-controlled process of Probate to accomplish these tasks.
The type of person who is a good candidate for the job of Executor or the job of Successor Trustee is someone who you have a high degree of confidence in, someone who is capable, self-starting and organized, and someone who can successfully navigate the relationships of the other family members and beneficiaries of your estate.
You need to truly trust and have confidence in the person you leave in charge. Although your Will of Trust may give some detailed directions to your Executor or Successor Trustee, in almost every administration of an estate, there are many discretionary decisions that this person must make on their own. Take the simple example of selling your home in order to distribute the proceeds therefrom to your named beneficiaries. Discretionary decisions will have to be made about whether to use a Realtor, which Realtor to use, what the listing price should be, when to list the property, what types of offers to consider, which offer to accept, what the terms of the acceptance of the offer should include (repairs to the home, timing of sale, how much earnest money will be required, inclusion or exclusion of back-up offers, etc.). And, that is just one of many decisions that a person left in charge of an estate is often faced with.
So, you need to have confidence that the person you’ve selected will do their best to honor your wishes and try to achieve your desired outcomes for the sake of your estate beneficiaries. All of this is often complicated by the fact that the person you’ve left in charge may themselves be one of the beneficiaries of your estate.
Next, you need to select someone who is able to take on the types of duties they will be called upon to perform. Someone who does not take charge or who allows situations to linger unaddressed is a poor choice for these jobs. Procrastination rarely makes the administration of an estate turn out better for anyone. Additionally, this person needs to be organized and detail-oriented, or willing to have an attorney be organized and detail oriented for them. Record keeping is very important in estate administration, as is time management. For this reason, geographic proximity to your location of residence at the time of your death can be a good practical consideration when nominating the person in charge of your estate (although advances in technology have certainly lessened the importance of this particular factor).
Finally, consider who all of the people will be that will have an interest in your estate, or legal rights to be made aware of its administration. These parties can include your children (or step-children), other family members, your non-family member beneficiaries (if any), charities to which you are donating, etc. Does the person you are leaving in charge know all of these parties? Do they get along well with them? Do they have long-standing personal grievances with any of them? The dynamics between your Executor or Successor Trustee and the other persons or entities that will be involved during the administration of your estate must be carefully considered when making your nomination. Do not set everyone up for disaster and expensive courtroom drama by pitting two or more conflicting family members against each other if you can prevent it!
And two bonus considerations — what about using two or more people together as co-Executors or co-Successor Trustees? And what about using a professional third party that will be paid for their services? Both of these approaches are legal, and both have pros and cons that should be carefully considered. Don’t force two or more nominees to work together if you know they will not agree on things — as they will ultimately wind up fighting each other in court. Consider using a third-party professional if the estate is large enough to warrant it (most professionals charge a percentage of the estate value and require a minimum value of at least $250,000-$500,000), and especially if it is the best way to avoid conflicts within your family after your death.
My law firm is currently offering free telephonic, electronic, or in-person consultations concerning creating or reviewing estate planning documents.
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Robert J. Green is an Elder Law, Trust, Estate, Probate, & Guardianship Attorney and the owner of Kootenai Law Group, PLLC in Coeur d’Alene. If you have questions about estate planning, probates, wills, trusts, powers of attorney, guardianships, Medicaid planning, or VA Benefit planning, contact Robert at 208-765-6555, Robert@KootenaiLaw.com, or visit www.KootenaiLaw.com.
This has been presented as general information and not as legal advice. Do not engage in legal decision-making without the advice of a competent attorney after discussion of your specific circumstances.