It’s difficult to pick an executor or trustee to implement your wishes after your death. Your favorite child is usually your favorite for a reason, but that doesn’t mean that s/he is best suited to be your executor. And an attorney or trust firm may be a safe choice, but fees could make that too expensive for your taste.
Make sure your legacy doesn’t include confusion, arguments or hard feelings. Here are some options to help you make the best choice for you and your family.
Of course, the first thing you’ll do is get a will (or a trust) on paper and get professional help. Most experts don’t recommend a do-it-yourself estate plan.
The next step is picking an executor for your will and your wishes. Here are some things to consider.
Executor? Or Trustee?
Do you need an executor or a trustee? Daniel Razvi, attorney and senior partner at Higher Ground Financial Group in Frederick, Maryland, says: “If you have real estate, you’ll probably need a trust instead of a will. But the executor and trustee are generally the same person.”
A will directs the distribution of your assets after death, trusts are effective once the assets are transferred into the trust. Your assets are legally transferred to the trust, except retirement accounts. You are the trustee until your death, then the person you select is responsible for management and distribution of your assets.
How about one of your children?
“Most often I see my clients choosing their kids or one of their kids to be a trustee or executor,” Razvi says. “But not everybody wants their kids to be trustee. It needs to be somebody that you feel can take care of money honorably and well, somebody that can follow your instructions. Anybody you choose is legally required to follow your instructions, but it’s nice if they don’t have to be compelled to do so by a court.”
It’s also important to have a backup, says Jennifer Belmont Jennings, an attorney and Certified Financial Planner at MGD Law in St. Louis, Missouri. That can be a corporate entity, but larger banks may not be interested in smaller estates. There are, however, smaller trust companies you can hire, she says.
Third party or family member
A third-party trustee or executor may be expensive, so you may want to stick with a family member. “Banks and the lawyers will do it for you, but they’ll charge a fee,” Razvi says. “So, usually you pick a family member that may not charge a fee.”
Family Member Fallout
Sometimes selecting one family member of another can cause hard feelings and damage family relationships. For families concerned about that Razvi recommends split roles, which does not necessarily mean co-executors. “You can assign different roles in your estate plan to different people,” he says. “And you can make your kids back up for each other.” For example, name one child the executor and name the other as the administrator of the healthcare power of attorney who can make decisions for you when you are incapacitated.
It’s not easy
Keep in mind that the job of executor or trustee is not easy. “It is a job,” says Belmont Jennings. “It’s work. It’s not easy. “You might be working on selling the house, getting it ready, having to deal with the clutter, having to distribute assets to people.
“You’re hiring the lawyer to file the paperwork if you’re doing stuff with court. You’re responsible for getting the tax return prepared for the year of death. It’s your responsibility.” That’s why for some families a family member who does that for a living it might be a more natural choice rather than a “favorite child.”
Co-executors?
Having co-executors can be a bad idea. Co-executors are a bad idea, says Razvi. “It’s very unwise to have two people simultaneously,” he says. “You don’t want to have multiple people being the trustee or the executor at the same time because they would have to agree on everything. And they can override each other.”
“It’s better to have one person listed and then usually the document will say ‘and if this person is unable or unwilling to serve as executor or trustee, then I will appoint this person.’”
Healthcare directives and Healthcare POA
A healthcare directive and healthcare power of attorney are critical in your choice. It is important that you pick someone who you trust because ultimately, they will make the decision on whether to pull the plug. “It’s really important from that standpoint to make sure you have people you trust and are able to express what your wishes, because a lot of families do argue over that,” says Belmont Jennings.
“You have one saying no, they wouldn’t want to live this way. And you have one that says no, they told me that this is what they want. If it’s not written down in a way that complies with state statute, it’s a lot more complicated and it’s a lot more stressful for your family. They’re fighting and they’re spending your money on lawyers.”
YOUR TURN
Are you – or were you – an executor? How was it? Share your experience, advice or tips in the comments!
Did you know that Senior Planet has updated its options for charitable giving – which often has tax advantages? You can now give gifts of stock, or donate directly from your IRA. Visit here for more information on all the options, plus instructions on how to give.
Rodney A. Brooks is an award-winning journalist and author. The former Deputy Managing Editor/Money at USA TODAY, his retirement columns appear in U.S. News & World Report and Senior Planet.com. He has also written for National Geographic, The Washington Post and USA TODAY and has testified before the U.S. Senate Special Committee on Aging. His book, “The Rise & Fall of the Freedman’s Bank, And Its Lasting Socio-economic Impact on Black America” was released in 2024. He is also author of the book “Fixing the Racial Wealth Gap.” His website is www.rodneyabrooks.com
Your use of any financial advice is at your sole discretion and risk. Seniorplanet.org and Older Adults Technology Services from AARP makes no claim or promise of any result or success.