Selecting an Executor or Trustee

Kristen R. Testaverde, Esq.

When creating an estate plan, you will also need to consider who will be the executor of your will and/or the trustee of your trust.  These people are called fiduciaries, which means they are individuals with whom property or power is entrusted for the benefit of another.   They will have a fiduciary duty to act in the best interest of the beneficiaries, who are the individuals receiving property from the will or trust. 

Basic Criteria:  When selecting a fiduciary, you will need someone of adult age (18+) who is competent, not a convicted felon, and someone who is not otherwise found unsuitable by the court.  When selecting a trustee for your trust, you may also consider a corporate trustee.  If the corporate trustee is a bank, it must be authorized to be a trustee in its corporate charter.  Other types of corporations must satisfy state law requirements. 

 Additional Considerations:  In selecting an executor or trustee, you should also consider personality traits.  You should have complete trust in your fiduciary to carry out your desires.  You should seek someone with common sense and good judgment, who will act prudently and reasonably when making decisions.  The fiduciary should show a sense of financial responsibility.   You may also wish to consider their level of experience, skill, and awareness of legal issues.  Further, you may wish to consider the fiduciary’s ability to be impartial to beneficiaries.   In addition, consider the person’s longevity - is this person likely to outlive you long enough to carry out his/her tasks?  Consider also proximity of the fiduciary to the property and the level of difficulty this will add to completing tasks.  You should also think about whether this person has other distractions in life.  While your brilliant banker nephew would be great, does he have the time?  Lastly, you want someone who can handle your beneficiaries.  A fiduciary should be calm, tolerant, understanding, patient, and have an objective outlook. 

Individual vs. Corporate Fiduciary:  As noted above, you may choose an individual person to be your executor and/or trustee, or a corporate trustee for your trust.   There are pros and cons to both decisions.  For example, if your trust is of substantial worth and there are tax implications, this could be a demanding job for an individual.  He/she may lack experience and may have to hire professional assistance, which can be costly.   In choosing a family member, there may be tension in making decisions.  On the other hand, an individual may be willing to serve at no charge, where as a corporate trustee will charge a fee.  An individual may also better understand your goals for your trust and have an appreciation for the preservation of certain property.  The individual may also be more familiar with the family or a family business. 

A corporate trustee can be beneficial in that it can offer skill and experience, and often additional services.  Corporate trustees are also regulated by federal and state laws, and are subject to inspection.  There is also a level of accountability to consider, as in the event of wrongdoing, there is a greater likelihood of recovery from an institution than an individual.   

Multiple Fiduciaries:  In a trust situation where there is substantial worth to be considered, some may choose multiple fiduciaries to blend the expertise of an institution with the care and personal knowledge of an individual.  This can provide a system of checks on management, but can also be costly. 

Regardless of the size of your estate, it is important to put a trustworthy source in charge of it.  You want someone who can carry out your wishes with the care and level of experience fit for your circumstances.