Choosing who will administer your estate (Personal Representative), or your Trust (Trustee), is as an important decision as you can make when crafting your estate plan. When you pass, the most carefully made plans will only be as successful as the person, or persons, you charge with carrying them out. Below are some topics for you to consider with your loved ones as you consider this selection.
CAN THEY EXERCISE GOOD JUDGMENT?
The administration of an estate or Trust involves many tasks. Such tasks include: inventorying assets, notifying potential creditors, settling debts and bills, and distributing property. Many of these tasks must be completed on a timeline, and subject to deadlines. Your choice of a Personal Representative or Trustee should be someone who has a demonstrated history of responsible behavior. If your perspective choice has a tendency to procrastinate, and struggles to get things done, they may not be a good choice. Select someone who is capable of keeping up with the workload and who is able to complete tasks in a timely manner.
ARE THEY COMPETENT?
Estate or Trust administration can be as simple or complex as the assets in the estate or Trust and the terms you choose to disburse them. A simple estate, containing only a few bank or investment accounts to be liquidated and transferred upon your death to a single beneficiary does not require much specialized knowledge. Conversely, an estate or Trust containing multiple categories of assets to be administered over a long duration to multiple beneficiaries may require some specialized skills that few laypersons possession. If your plan falls into the latter category, consider not just how experienced they are personally, but how willing they may be to seek professional help when they need it. As you slide down the scale of complexity, the use of a professional or corporate fiduciary may be necessary.
ARE THEY EMOTIONALLY MATURE?
Your passing will likely be an emotional time for your loved ones. Probating your Will takes time. Likewise, if your Trust contains real property or other assets that are slow to liquidate or has restrictions on how soon disbursements can be made, a Trustee may find themselves administering your property over a period of years. Your family may not appreciate the delays. Choosing someone who is competent and responsible is a great start, but also consider how adept they are at handling your relatives. Do they return calls? Will they be willing to take the time to explain and communicate the process? Will they be impartial? You are likely aware of the relative in your family who lives for drama. This may not be the best choice in a family dynamic where emotions are already running high. Consider how well your choice will be able to deal with unwarranted backlash from angry heirs. This may be exacerbated if certain beneficiaries are expecting more than you have designed for them.
PHYSICALLY HEALTH & LOCATION?
Choosing someone who fits the criteria of all of the categories above will be of little use if they do not outlive you. Even if they are still alive, if their physical or mental abilities have diminished by the time of your death, they may not be willing to perform the task. Consider someone who will have the time and energy to dedicate to your estate or Trust.
Also their physical location may also be important, especially for the probating of your Will. Having them physically present in the area where your estate will be probated provides them with the opportunity to attend Court hearings.
MULTIPLE PERSONAL REPRESENTATIVES/TRUSTEES?
Commonly people will select multiple people to serve as co-personal representative or co-trustees. This strategy has some advantages and some drawbacks. As a potential benefit, choosing more than one agent may help make up for an area when your primary choice is deficient. For example, you sibling may be advancing in age, so choosing a younger relative to share the workload may help the administration to run more smoothly. Or, choosing one child and not the other may create hurt feelings. Or if you have a mixed family that is dividing assets equally, you may wish to choose one person from each side of the family.
That said, choosing co-agents can result in more conflict. Unless you provide otherwise in your estate plan, co-agents must act in unison. That means unanimous decisions. Sibling rivalry can create an administrative nightmare for your estate.
Takeaway
As you review this list, keep in mind that the person best suited to be your Personal Representative or Trustee at the time you make your estate plan, may not remain the best person over the entire time you have it. If you have not reviewed your plan in several years, this is one task you should revisit to make sure you still have the best person in place. Need assistance drafting or updating your estate plan? Contact CASHMAN LAW today for a free consultation to see how we can help.
Thank you for taking the time to read our blog. If you would like to receive notice as each new blog article is posted, fill out the “Contact Us” form and indicate in the comments section that you would like to receive an email. You will not be contacted for any other purpose, unless you specifically request it.
The contents of this blog are intended to convey general information only and not to provide legal advice or opinions. The posting and viewing of the information on this blog should not be construed as, and should not be relied upon for, legal or tax advice in any particular circumstance or fact situation. While effort is taken to update the information presented, it may not reflect the most current legal developments. Please contact CASHMAN LAW FIRM LLLC (Hawai’i)/ CASHMAN LAW LC (California) to consult with an attorney for advice on specific legal issues.