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Estate Planning: Choosing Your Executor or Trustee

Select the individual best suited for the job and address issues while your still around.

Chapter 5,  excerpted from AARP Crash Course in Estate Planning: The Essential Guide to Wills, Trusts, and Your Personal Legacy, by Michael T. Palermo, JD, CFP

Naming a Family Member as Your Executor or Trustee

People often choose a loved one “automatically.” In many cases, their choice is undoubtedly the person best suited for the role. The choice of any individual as your executor or trustee always carries the possibility of squabbling among your survivors, if there are more than one.

Ideally, to keep the peace, the person selected should be acknowledged by the other beneficiaries as being fair. At a minimum, you must feel confident that your choice will be fair-minded, whether he gets credit for that quality or not. Your designee should have common sense, including the wisdom to seek and heed sound professional advice when it is called for.

Finally, your executor or trustee should be the type of person who gets things done—neither a procrastinator nor likely to be flustered and stymied if problems arise.

When one of several adult children is selected to serve as the executor or trustee for one or both parents—a typical family scenario—a number of issues can arise. It is therefore wise to communicate your decision to all concerned. Hopefully, any sibling resentment or potential problems will surface while you are still around to respond. Consider also whether it’s appropriate to address the question of the fee to be taken by the child as executor or trustee. That can be a big point of contention that may be avoided if the matter is discussed and an understanding reached.

Warning! Keep sentiment out of your choice of executor or trustee.

Naming multiple children as co-executors or co-trustees is usually (but not always) a bad idea, in my opinion. This is primarily because it requires two or more people to agree to—and sign off on—everything.

When one child is not well suited to the task but you don’t want him to feel left out, it’s invariably a mistake to assign it to him anyway. Including that child as a co-executor or co-trustee will very likely complicate matters at best; at worst, it will invite costly disagreements or bitter personal disputes. If this is a potential problem, consider using as your executor or trustee an institution or a trusted family friend or attorney. Better yet, choose the qualified child you want to serve, then sit down with everyone and discuss why you made that decision.

A will or living trust can distribute your most valuable possessions—but which is the best option for you? Compare the pros and cons, here.

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