As we gathered around the Christmas tree on Christmas day, someone asked about what I had recently done. I responded, I wrote a book, “The Executor’s How to Manual.” One person commented, ‘My 2 sisters and I are trying to decide on who should be my father’s executor (to close up his estate when he dies and distribute his money to his beneficiaries).’ This is a very important decision that is all too often not given enough thought that it deserves and can lead to unintended consequences with disastrous and costly results; and, it is a decision that should be done with the reasoned input of your estate planning attorney: Consider these common scenarios: 1. A widower liked to have things in order and wanted to avoid any discord that might arise among his children. The oldest child was a single, quiet, decision-maker who seemed to like to get tasks done without a lot of discussion. The middle child was very out-going, liked to be involved, and liked to have others involved with her projects, and decisions. She was more concerned about the process. The third child was ‘along for the ride.’ She was okay as long as the process was smooth and his parent’s wishes were respected. Having been given about 6 months to live, the widower hired Bill to come in, meet his children, make certain that his financial affairs were in order and to coach his executor through the process, before, during, and after his passing to the other side. His daughter was especially grateful that she was kept ‘in the loop’ because she sensed that her older brother would be ‘too private and withdrawn.’ Within 2 weeks, Bill had everything in order, and soon after Bill reported to the widower, he peacefully passed over to the other side to be with his wife of over half a century. Everything (financial-wise) went very smoothly. 2. A widow also had 3 children; but, did not want to name any of her children as her executor. She knew what she wanted, was clear, and she didn’t want anyone second-guessing her wishes after she passed. Since she very much respected and trusted Bill, she named Bill as her executor. Because of Bill’s background and experience, he was able to sell her home within a short period of time. All her children had to do was sign IRA beneficiary forms and other related documents. Bill was able to get her estate closed without the children ‘chewing on each other’ as so often happens, especially when the Closing of an Estate is delayed, often because the executor is not certain as to what and how to do it. 3. A trusted friend or distant (extended) family member (like a cousin) can be an executor if the widow is concerned about her children’s family dynamics. Sometimes, when the parent dies and is no longer available ‘to referee’ the sibling rivalry, closing the estate can become dicey. Especially if an in-law or opportunistic attorney enters the picture and wants ‘more,’ whatever that ‘more’ might be. ‘More’ doesn’t always have to be about money; it may be the result of perceived past-offenses within the family dynamics. 4. A Commercial Trustee, like a bank; however, they have limits as to how small an estate that they will handle, trustee and executor fees, the employee that the deceased liked moves on or retires, the bank sells out to another bank with different rules and corporate policies. Bill recommends against naming co-executors because it is just more cumbersome as financial institutions like one ‘point person’ – not a committee; and, then there are forms that have to be prepared, signed, notarized by all of the executors. With the internet and our speed of communication, the executor doesn’t have to be nearby. It is certainly helpful; but, not a ‘deal-killer.’ What is MOST important is to have 3 or 4 ‘successor executors named. Here are a couple of reasons: 1. The named executor may resign. 2. The named executor may not be able to serve, for many different reason – some personal to the named executor. 3. The named executor may even die before the estate is closed and the process is finished. 4. Bill discovered that when he was named as # 4, Financial Institutions like banks would talk to him without Privacy restraints. If there are no executors left, the Probate Court in the county of the deceased, will have to name a Court Appointed executor. This may be a rubber stamp decision of the beneficiaries’ collective decision; but, still very expensive AND extremely time consuming. Naming a grandchild as the 5th Successor Executor might be a good strategy. This is what Bill calls Anticipatory Management: Looking ahead to attempt to avoid Unintended Consequences. Naming the Executor and the Successor Trustee of the Living Trust is a critical area that needs to be done under the care and consultation of an experienced estate planning attorney.
Posted on: Wed, 07 Jan 2015 04:13:22 +0000
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