Considerations for Choosing a Trustee or Executor

When setting up the complex structure of an estate plan, choosing a trustee, executor and other fiduciaries can pose a daunting challenge.

Working closely with a tax and estate-planning lawyer can help you understand the implications of these decisions, so that you can make informed choices. Although fees are always a consideration, it’s important to understand the types of decisions your fiduciaries will have to make and how you can help ensure that they honor your wishes.

How to choose an executor and trustees

Choosing Trustees in the Estate-Planning Process

For each trust you use in your estate plan, you must designate a trustee to handle the duties specific to that trust.

Trustees may make decisions about investing the assets of the trust, handling tax preparation and filing, making distributions to beneficiaries, protecting the trust’s assets and overseeing the recordkeeping and other administrative matters.

Because trustees carry so much responsibility, choosing the right individual or entity is paramount to the success of your estate plan. You must also designate a successor, should your first choice become unable to fulfill their obligations.

Although you may be tempted to designate a trusted friend or family member for this role, discuss your options with your estate-planning attorney to determine the best course of action for your beneficiaries and your goals.

Choosing an Executor or Personal Representative

An executor — sometimes called a personal representative, depending on the state where you live — will be responsible for overseeing the disposition of your estate upon your death.

Specifically, an executor handles directions in accordance with your will. This may involve the distribution of assets detailed in your will, reconciling any debts of the estate, filing final tax documents, etc. To accomplish this goal, your personal representative may work closely with other members of your team, including your CPA, attorney and trusted advisors.

Although you can choose a close friend or family member to act in this capacity, most estate-planning attorneys recommend designating a professional fiduciary. This helps remove pressure from family members as they cope with an already challenging time in their lives. It can also help prevent hard feelings and disputes among your heirs and designees.

Other Estate-Planning Fiduciaries

In addition to trustees and a personal representative or executor, you may also have to designate other individuals or entities in a fiduciary role.

For example, if you have minor children, you may want to designate a guardian in the event that you (and the child’s co-parent, if applicable) can no longer fulfill those duties. You may also want to name agents for handling health care and financial decisions via a power of attorney.

Working with a tax and estate-planning attorney can help ensure that you have the correct structure and documentation in place. Reviewing your estate plan regularly will also help ensure that, should circumstances change, you keep your named representatives and agents closely aligned with your objectives.

At Cantley Dietrich, we assist business owners and highly compensated individuals with asset protection, tax planning and complex estate planning. Our knowledgeable team will help ensure that you designate the best possible trustee, executor and other fiduciaries as appropriate. Contact us today to schedule your personal consultation with one of our experienced estate-planning lawyers.