No matter how much effort is put into planning an estate, the plan won’t work smoothly if the wrong executor is chosen — or, if a living trust, the wrong trustee. This article discusses four common mistakes people make when choosing an executor or trustee.

Estate Planning Red Flag

You haven’t chosen the right executor or trustee

No matter how much effort you put into planning your estate, your plan won’t work smoothly if you choose the wrong executor — or, if you have a living trust, the wrong trustee.

Your executor (referred to as a “personal representative” in some states) may have a wide range of responsibilities, such as arranging probate, identifying and taking custody of assets, making investment decisions, filing tax returns, handling creditors’ claims, paying the estate’s expenses, and distributing assets according to your will. The trustee of a living trust (also called a “revocable trust”) will have similar responsibilities.

Here are some common mistakes people make when choosing an executor or trustee:

Automatically choosing a family member. You want to select someone you trust, and a family member may be appropriate. Too often, though, family members lack the requisite skills and experience with financial matters — though they can retain professional advisors. Also, choosing a family member can create tension if other relatives believe your choice is biased.

Choosing someone far away. Selecting a person who lives and works at a distance from the location of your assets and beneficiaries can make the process more difficult, time consuming and expensive.

Not making sure the person is willing to serve. He or she isn’t obligated to take the job, so be sure to discuss your plans first.

Failing to designate a backup. Name one or two alternates in case your first choice declines to serve — or resigns, becomes incapacitated or dies before your estate is settled.

If you’re having trouble finding someone who meets all of your requirements, consider appointing co-executors or co-trustees. For example, you might choose a family member to work with a financial or legal professional. Co-executors or co-trustees can create other challenges, though. For instance, you won’t want to name two people who’re unlikely to have a productive working relationship.

If you would like further information or assistance with pursuing a guardianship over an adult or child, please contact Euless Estate Planning and Elder Law Attorney, Antoinette Bone, at (817) 462-5454 or email info@abonelaw.com.

To comply with the U.S. Treasury regulations, we must inform you that (i) any U.S. federal tax advice contained in this newsletter was not intended or written to be used, and cannot be used, by any person for the purpose of avoiding U.S. federal tax penalties that may be imposed on such person and (ii) each taxpayer should seek advice from their tax advisor based on the taxpayer’s particular circumstances.

Nothing in this message is intended to provide legal advice.  This message is for educational purposes only.