Why You Need a Professional Estate Executor or Trustee

Why You Need a Professional Estate Executor or Trustee

We all know we need an up-to-date will, and we know a critical part of a valid will is the appointment of our executor or trustee. So who have you appointed? Odds are good you’ve appointed one of your adult children, perhaps the eldest. It seems like a logical choice: they know you and other family members well and they’ll still be young enough when you pass away to take on the big responsibility of administering your estate or managing a trust.

When “logical” doesn’t make sense

It might be logical for you, and it might work if you have only one child, but if you have more, what about your other children? Think about it: do you really want to put one of your kids in the position of managing ­– and doling out – money for the others? Wouldn’t you prefer that they be able to be the best siblings possible to each other, especially after their parents are gone? But by naming one of your kids as trustee for the others you are putting them in the highly unusual position of being required to be the “banker” having full control over their siblings’ assets from your estate, rather than being there for each other as a sibling should be.

If you appoint a child as your executor, understand that an estate executor is entitled to compensation for the great amount of work they do, the time they put in and the responsibility they carry. But how will the executor’s siblings feel about the executor taking “additional” funds from the parent’s estate for this purpose? Might they feel this is unfair? Resentment can quickly arise, with non-executor siblings believing the deceased parent “always loved you more.”

A special relationship

Relationships between siblings are so important in our lives. Think of the unique relationship sisters share, or the close bond between brothers. Because these relationships are special, they can be deeply damaged by divisive family situations. Do you want that for your children?

Think of your situation with your own siblings. Have you ever felt like you needed to be there for them at a time of need? Did you want them with you when you were going through something difficult? Now think about trying to be there for them but also having control over their inheritance and money being tight. What would you do if your brother believed he needed some funds from your parents’ estate to get through a difficult situation, but you knew that if you gave him the money there might not be enough for all of you in the future? Would you feel like you were paying him a portion of the money that would come to you if you were to leave it invested instead of paying it out?

It’s virtually impossible to be objective in a situation where siblings need to console and support each other and to be the best siblings they can for each other when one of them has control over the money.

Simmering sibling rivalry

It sometimes happens that in the stress following the death of a parent, long-forgotten sibling grievances can emerge, especially if only one sibling is “in charge.” It’s troubling to think that an executor might hold a grudge, or even subconsciously base estate decisions or payouts on “ancient history” such as “you pushed me off my bike when I was 5” or on perceptions of past parental unfairness. But it can happen.

Consider, too, what will happen if your children are in quite different financial situations. Does one have a high-paying job while another does not? Does one have more children to support than another? How will these differences affect their perception of the fairness of estate distribution decisions?

Finally, consider whether the child you think should be your executor or administrator has the skills, experience and time to carry out the job properly. The task of administering an estate has become much more complicated – and much more litigious. Do you want your children meeting in court with their respective lawyers in tow?

The professional advantage

In the end, the most logical decision is to spare your children the potential resentment, arguments and hurt that can come when one is the trustee or executor. Do what you can to ensure that their precious sibling relationship remains strong. Appoint a professional as your executor or trustee. This way, you can rest assured that all the legal, tax and accounting ins and outs will be taken care of expertly and that a neutral third party will be handling the money, which goes a long way in ensuring that your children see your estate as fair. Meet with your lawyer to discuss the appointment of a professional estate trustee or executor, and then enshrine that choice in your will – and don’t forget to give copies of your will to your children so that they know in advance that your estate will be managed fairly by a professional.

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