If you’re planning to make a Will, you may be wondering what jobs you need to assign, and who should fill those roles. Here are things to consider:
Executor
Your Executor is the person who gets your last bills paid, handles necessary paperwork, and then distributes estate assets where your Will says they should go. A good Executor is detail-oriented and organized. It is less important whether the Executor lives near you or in another state. The work can be done from anywhere. The Clerk of Court oversees the Executor’s work to be sure it is done properly.
Many people choose a family member (either immediate or extended family member) as Executor. Long-time friends are common choices too. It doesn’t matter whether the Executor is also a beneficiary in the Will or not.
An Executor is entitled to be paid a commission for their work based on a statutory formula, in an amount approved by the Clerk. There is no need to leave a gift in the Will to your Executor to see that they get paid.
What about a professional Executor, like a lawyer, accountant, or bank/investment company? This may be a good fit where the family dynamic is strained. The main downside is the expense. Professional Executors will be paid whatever rate is in their contract with you. It is generally higher than what an individual Executor would be paid under the statute. Also, the minimum size estate for some banks/investment companies may exclude some clients.
Trustee
If your Will leaves an inheritance to a minor child or to an adult who would have difficulty managing the assets on their own, your Will should include a trust for their benefit. This type of trust is called a “testamentary trust.” It does not hold any assets until after you are gone and the Executor distributes estate assets to the Trustee. The Trustee manages the trust assets for the benefit of the beneficiary(ies) according to the instructions spelled out in the Will. The Trustee distributes assets to or for the beneficiary however and whenever the Will specifies.
The same skill set that makes a good Executor makes a good Trustee. It can be the same person as the Executor, or you could appoint different people to these roles. As with an Executor, the most common choices for Trustee are family members or friends. There are professionals who will serve as Trustee with a contract that covers their compensation. Individual Trustees are entitled to “reasonable compensation” or whatever compensation formula is described in the trust portion of the Will.
Contingent Guardian
If you have a minor child, your Will should appoint someone to serve as a Guardian to finish raising your child until age 18, if something happened to both parents. Some people choose a family member. Others choose a close friend, for example, the parents of your child’s good friend. Choose someone whose approach to parenting is like yours. If you must choose between family living at a distance or friends who live nearby, consider which your child is likely to be more comfortable with; there is no uniformly right or wrong answer to that question. The Clerk of Court will need to approve your choice (after your passing), but the Clerk relies heavily on what your Will says. The Trust contained in your Will makes your assets/funds available to the Guardian for the expenses involved in raising a child. The Trustee and Guardian can be the same person if the person you have in mind has both skill sets. If they are different people, it is important that the Trustee and Guardian are likely to work well together. There is no commission or fee to a Guardian (but they could get a commission for their Trustee work if they are also Trustee).
These tips may help you refine your plans for your Will. If you are struggling with making the choices for your Will, talking with an attorney about your option may help. And remember, having an executed Will with an adequate plan is better than having no Will while you wait for the perfect plan to come to mind.
Kim K. Steffan is an attorney with Steffan & Associates, P.C. in Hillsborough. She can be reached at (919) 732-7300 or kim.steffan@steffanlaw.com.