We do not like to think about death. We are not wild about paperwork and procedures, either. Administering the estate of a deceased person (decedent) unfortunately involves death and taxes and careful accounting and attention to detail.
In your will you name an executor to handle your estate. A commonly known term for the executor is â€œpersonal representative.â€ If you die without a will, the Court will appoint a personal representative to carry out this function, so it is preferable for you to make the choice. If you use a revocable trust for your estate planning, you will name a successor trustee.
Who should you name as your executor or trustee? It is important to be sure that your executor or trustee is capable of handling the responsibility. The executor or trustee must be detail-oriented, be able to persevere in dealing with bills and insurance reimbursements, hospital paperwork, Medicare, ambulance, and doctor costs incurred in a last illness. The executor or trustee must be someone who is comfortable in handling paperwork, not afraid to ask questions, and have decent communication skills. An executor or trustee may have to manage an investment portfolio and make important investment decisions.
Your executor or trustee may also have to cope with relatives who may be wondering why itâ€™s taking so long to receive their inheritance or why their bequests are smaller than they expected. This can happen if, for example, the decedentâ€™s money was aggressively invested in the stock market, and those stocks nose-dived after he or she wrote the will or trust. The executor or trustee is responsible for various tax returns, and may have to manage the decedentâ€™s property throughout the probate process. The process can last more than a year. The process can involve managing an investment portfolio and making important investment decisions.
Some people name a professional executor or trustee, rather than naming their spouse or another relative. This assures that the executor or trustee has no possible conflict of interest, since the executor or trustee does not stand to gain from the will or trust. In general, the larger the estate, and the more the potential for conflicts, the more you should consider naming a professional as executor.
An additional benefit of a professional executor or trustee is that it lessens the possibility of personal liability for a family member. In conclusion, there are many factors to consider in naming a successor trustee or executor.
Jeffery J. McKenna is a local attorney licensed in three states and serving clients in Utah, Nevada, and Arizona. He is a partner at the law firm of Barney, McKenna and Olmstead, with offices in St. George and Mesquite. He is a founding member of the Southern Utah Estate Planning Council. If you have questions or topics that you would like addressed in these Wednesday articles please email him at email@example.com or call 628-1711.