By Linda T. Cammuso
Choosing the personal representative (the new term in Massachusetts for “executor”) of your estate is one of the most important decisions in the estate planning process. Likewise, if you have one or more trusts, choosing a trustee to act in the event of your death or disability is critical.
In selecting candidates for these roles, it is important to understand the duties and functions of each. A personal representative’s (“PR”) responsibilities include administering your will, determining and paying your final bills/debts, filing your final individual income tax return, and distributing all your “probate assets” (assets without a joint owner or listed beneficiary). This is a fairly short-term position, and duties are usually fulfilled within the first year of death.
A trustee’s job however may last for a number of years. For example, a trust with minor or disabled beneficiaries, or one that is meant to last for a beneficiary’s lifetime, will involve a long-term trustee role. A trustee’s duties typically involve making decisions about how and when to distribute trust assets to beneficiaries, as well as overseeing the investment of the trust assets and ensuring that annual tax returns are properly prepared and files.
PRs and trustees usually hire legal counsel as well as investment and tax professionals to guide them in various decisions and financial matters. The PR or trustee need not have these professional skills, and in fact people often choose family members or friends for these roles.
Perhaps the most important factor in selecting the appropriate PR and trustee is trustworthiness, from the standpoint of honesty and integrity as well as responsibility. Since this individual will be responsible for time-sensitive legal and financial matters, it is also critical that the individual be detail-oriented and capable of multi-tasking.
While people are often influenced by geographic considerations, don’t exclude someone as a potential PR or trustee simply because they are located out-of-state. Technological advances have made it possible for a non-local PR or trustee to act just as effectively with the use of local advisors.
Consider also the age of the person you are choosing: older siblings or parents may have great attributes for these roles, but be sure to name alternates in case your first choice predeceases you.
From a family dynamics perspective, it is important to remain mindful of the interpersonal implications if you are contemplating a family member to act as PR or trustee. Consider whether the individual would be capable of remaining objective in the face of pressure, and how family harmony could be impacted. If your family dynamics are sensitive, or if you are simply worried about disrupting family relationships, consider naming a non-related person instead.
Legal, tax and financial professionals, including institutions such as banks, are frequently called upon to serve as the PR or trustee when there is no suitable family member or friend available. Professionals can also serve as a co-trustee or co-PR with a family member or friend; this is helpful both to streamline the more technical functions of the role and to facilitate objective decision making when family dynamics become challenging.
Finally, remember that the choice of PR and trustee is your decision. For the sake of your surviving family members and other beneficiaries, be sure to make this choice carefully and with proper legal advice.
Linda T. Cammuso, a founding partner at Estate Preservation Law Offices and an estate planning professional, has extensive experience in estate planning, elder law and long-term care planning. Linda may be reached at www.estatepreservationlaw.com or by calling 508-751-5010. Archives of articles from previous issues may be read at www.fiftyplusadvocate.com.
