If a family member or friend has asked you to be the executor or trustee of their estate, you know that means they trust you with a big responsibility. But do you know if you should take it on?
Even if the person is developing a clear, detailed estate plan with the intention to avoid a lengthy probate process, there are always unforeseen complications. It’s wise to consider those potential complications and just how much time and work will be required before you agree.
Conflicts with heirs
If your widowed or divorced parent has asked you to be their executor or trustee and you’ve got siblings, will they respect your authority? If you’re the oldest or have the greatest amount of relevant experience, they may be fine with it. However, if there’s already sibling rivalry and you fear that this will tear you further apart, you may want to suggest that someone outside the family take on the job.
Sometimes parents name all their kids as co-executors. That can create an even trickier situation, especially when the co-executors disagree about something. It also might add even more work since a number of documents will need to be signed by all of you.
If a friend has asked you to serve as executor or trustee of their estate, consider the dynamics of that friend’s family. If you know some members of the family better than others, you could be accused of favoritism even if you do everything according to the estate plan and the law.
Time, work and travel
Consider how complex the estate is. Will you need to deal with real estate, investments or trusts? Are there potential difficulties due to former spouses, out-of-state or foreign assets, or business ownership that you will have to deal with? If so, can you handle them?
If you do end up serving as executor or trustee, you can seek the assistance of legal, investment, financial and real estate professionals. However, the more people you hire, the more money you’ll need to pay out of the estate. That may not go over well with the beneficiaries. Remember, though, that some mistakes (like paying the beneficiaries before you’ve made certain that all applicable estate obligations are paid (taxes, for example) can result in you having to pay those obligations with your own money.
All of these are important considerations before you say yes or no. Don’t agree to be an executor or trustee, thinking you can always change your mind. Doing that can cause the estate extra time and expense – especially if no alternate was named. It may be worthwhile for you to learn more about the job, or even get some legal advice before making a decision.