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Choose the Right Executor or Trustee

5 tips for a decision that can make or break estate planning

4. Name a team — sometimes. “We often use co-trustees because some trusts could last for a very long time or have a substantial amount of assets,” says Heilich. “The biggest benefit is that when you have tough decisions, they’re not all left in one person’s hands. So consider using more than one trustee — but not too many because that could cause administrative headaches.”

However, be aware of family tensions before naming co-executors or trustees. “I tell my clients not to name their children equally as trustees,” says Scott Zuckerman, president and CEO of Wexford Financial Strategies, a financial planning firm in New York. “There’s a potential they’re going to argue when it comes to money, no matter what they say when you’re alive. I’ve had clients fight over an $8,000 car when they were inheriting $3 million.”

Instead of focusing on “being fair” to your children, aim to prevent family conflict. “When it comes to legal battles, the person who makes out the best in the end is always the attorney,” explains Zuckerman. “Fights will cause more friction in the family, deplete the estate’s assets and take a lot of time. Do whatever you can to avoid legal conflict. If necessary, go with a corporate third party.”

5. Check back in a few years. Your perfect pick today may become supremely unwise tomorrow. “There may have been a divorce,” says Zuckerman. “I’ve said to clients, ‘I see your brother-in-law is listed as a trustee,’ and the client will say, ‘Oh, no, my sister and brother-in-law got divorced six years ago, and we’re estranged.’”

Avoid such situations by revisiting your choices after major life changes.

Heilich’s bottom line: “Consider corporate trustees only when there’s severe family dysfunction or you don’t have anyone qualified or who wants to serve.”

That said, Taneff says a corporate trustee may be smart for blended families. “God forbid you die and your second spouse gets involved with somebody else,” explains Taneff. “That person may start treating your biological children differently than his or her own. In that case, a corporate trustee would be good because it’s someone who’s neutral and semi-disinterested. With a second marriage, that might be preferred.”

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