How to Choose the Right Executor or Trustee for Your Estate
When it comes to estate planning, you must decide who will be in charge of ensuring your wishes get carried out when you pass. For those who have a trust, this individual is called a trustee. As for those with a will, this person is called an executor. Appointing the right person for the role is critical if you wish to avoid mishandled assets.
Below, we’ll discuss the steps in picking the right trustee or executor. This way, you can rest assured everything will be handled accordingly.
What Does an Executor or Trustee Do?
Both executors and trustees share the goal of making sure assets get properly distributed. But they still have a few differences:
Executor: Distributes the assets of an estate, just until the estate has been settled
Trustee: Manages assets in a trust, usually maintains their role for a longer period of time
Qualities to Consider
There are certain characteristics to look for in a good trustee or executor. These include someone who is:
Trustworthy enough to handle personal, legal, and financial documents
Organized and great at managing time
Good communication
Literate when it comes to handling finances
Calm under pressure
If someone lacks one or more of the latter qualities, it’s important to reconsider the role. A bad trustee or executor can cause delays, show a lack of interest, provide poor communication, make several mistakes, or mishandle your assets.
Who Should You Pick?
In many cases, people choose someone they’re close to, to be appointed as their trustee or executor. This may be their spouse, adult son or daughter, adult sibling, or a good friend.
Do you have more than one person you want to serve? This is an option, too. These are known as co-executors or co-trustees. While this can be beneficial in many cases, having more than one executor or trustee can also lead to disagreements.
If you don’t feel there’s a person in your life who would be fit for the role, there’s another option: a professional fiduciary. An attorney or trust company is another available option. These experts are especially crucial for large, more complicated estates where there may be confusion or disputes about your assets.
Talk with Them About Your Expectations First
Being named someone’s trustee or executor is a big title. It’s not something everyone is capable of or up for.
When selecting someone to oversee your trust or will, talk to them first. Tell them what you expect and a general idea of your estate plan. Communicate with them about the role and why you think they’d be a good fit. Talk about the responsibilities involved Most importantly, see if they’re willing to take on the role. Answer any questions they might have to ensure confidence on both ends.
What Happens if You Select the Wrong Person?
There’s always the possibility that your appointed trustee or executor was the wrong person. They may be unwilling to participate or have a circumstance that won’t allow them to. In other cases, they may not have good qualities for the role.
The good news is, the court can find a replacement. While a replacement can better ensure a good outcome, it can also delay the process as well. This makes it evident how critical it is to have a backup or successor listed when planning your estate.
Instead of a replacement, the court may require the intervention of a professional, such as an attorney, to oversee their work. This can prevent the mismanagement of your assets.
What Role Does a Professional Fiduciary Play?
Professional fiduciaries have formal training in the management of trusts or estates. They also hold a state license, must partake in ongoing education, and abide by strict standards.
While these third-party experts have the knowledge and expertise in what they do, they come at a cost. Meanwhile, appointing, say, a family member as your trustee or executor is free. But with their experience and unbiasedness, professional fiduciaries can be an excellent option for many.
Final Thoughts
Picking someone to manage your will or trust is a big decision. When making the selection, always ensure it’s someone who is trustworthy, responsible, calm, communicative, and intelligent. Most importantly, make sure the person you appoint to this role is willing to do the job. There’s also the option to hire a third-party if you’re hoping for someone more professional and unbiased.
If you’re unsure where to go in terms of assigning an executor or trustee, we’re here to help. Contact Yu & Yu Law today to learn more about your options.