Given that your trustee and personal representative (a/k/a “executor”) are charged with ensuring that your Revocable Trust agreement and Will are followed, it’s important to select the right persons to assume these responsibilities.
Both personal representatives of a Will and trustees of a Trust are fiduciaries. As fiduciaries, they are legally required to act for the benefit of your beneficiaries — not for their own benefit — in following the terms of your Will or Trust.
A trustee administers Trust assets per the Trust document; a personal representative administers the deceased’s estate per the Will document.
Consider the following in selecting the right trustee and personal representative:
Personal Integrity is a Must. Organizational and communication skills are also a plus, but they aren’t as important as honesty, and the ability to make impartial decisions when needed.
Diplomacy. Sometimes estate plan documents are unintentionally open to more than one interpretation, and diplomatic tact is required to negotiate possibly different interests among beneficiaries to successfully keep any disputes out of court. Diffusing disputes are important to future relationships among family members/beneficiaries. Staying out of court also helps preserve the assets for the beneficiaries because court fights are expensive.
Financial savvy. Whether assets need to be invested or sold, there’s a need to understand the process and to know whether and when to hire outside advisors for help. Payment of creditors, income taxes and estate taxes are also key duties of your trustee and/or personal representative.
Willingness and Ability to be Committed. The personal representative’s duties end when the probate court dismisses the personal representative — perhaps a year or so after the probate action was started. A trustee’s tour of duty depends on the trust language, but may continue for years. Sometimes coordination regarding all of your assets is improved if you’ve named the same person for both roles. Be certain to name at least one — and preferably two — backups to your trustee and personal representative so the successor trustee or successor personal representative can serve if your first choice is unable or unwilling to serve when needed.
Consider Fees and Personal Relationships. Because corporate trustees are businesses, they usually can be relied upon to be around for the long haul and are bonded. They may be a better option than naming a family member or friend as trustee when a neutral party is needed to resolve conflict among family members. At other times, they are a poor choice because of the size of their fees and the tendency of some corporate trustees to shuffle the account from one employee to another.
Review your Will and Revocable Trust provisions every five years at a minimum to see if the provisions in those documents still match your needs and desires. Particularly consider whether the person or persons that you’ve named as your trustee, personal representative, and successor trustees and personal representatives, are still the right people for their respective roles.
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