When planning your estate, choosing an executor or fiduciary is crucial. This decision significantly impacts the management and distribution of your estate. Here are some things you need to consider when making this choice:
Executors vs. Fiduciaries
Executors manage and distribute your estate. They gather assets, pay debts, and distribute what remains to beneficiaries. This role typically ends once the estate settlement finishes.
Fiduciaries have a broader role. They can act as trustees, guardians, conservators and executors. They manage assets, make financial decisions, and provide care or advice, often on an ongoing basis.
Professional vs. Personal executors or fiduciaries
Choosing an executor or fiduciary is not always straightforward. Some people pick someone close to them, but this can backfire if they are not competent or honest. Consider more than just personal feelings when making this choice. Here are some factors to consider:
Professional executors or fiduciaries
- Pros: They bring expertise and experience, ensuring efficient estate management. Their objectivity can reduce family conflicts, and they have access to extensive resources.
- Cons: Professional services can be costly and may lack the personal touch and understanding of family dynamics.
Family members or friends
- Pros: They are often more cost-effective and understand family dynamics and the deceased’s wishes. Trust levels are usually higher with someone who is known personally.
- Cons: They may lack the necessary expertise, leading to potential mistakes. They may also have conflicts of interest due to family relationships, complicating decision-making and potentially leading to disputes.
Once you have decided, inform the chosen person so they can accept or decline the role. This allows you to choose someone else if they refuse and helps them prepare if they accept.
Assigning your lawyer as executor or fiduciary
You can assign the lawyer who drafted your will or trust as your executor or fiduciary. They must obtain your informed consent and fully disclose potential conflicts of interest. They cannot require you to designate them as a condition of their services. This can be a choice but is not advisable due to potential conflicts of interest and ethical pitfalls.
Making the choice
Choosing the right executor or fiduciary is a personal decision that depends on your estate’s complexity and family dynamics. Whether you opt for a professional or a trusted family member, aim to ensure your estate aligns with your wishes, providing peace of mind for you and your loved ones.
