Choosing an Executor or Trustee

An important consideration when planning your estate is the selection of a competent executor and perhaps a trustee to ensure your wishes are carried out. Generally, you have two choices: 1) use the services of a financial institution trust department or 2) name a family member or friend.

Institutions offer the benefit of technical know-how and continuity over time. However, since they must adhere to established corporate policies, they may charge high fees, use conservative investment policies, and be less responsive to the needs of your beneficiaries.

Selecting a family member or trusted friend may reduce or eliminate fees and add a personal touch to the process. However, choose wisely because the duties and responsibilities involved are significant. Your executor needs to be adept at filing tax returns, making complex tax elections, and implementing investment strategies.

Just because a family member is the oldest surviving sibling or willing to serve doesn't mean he or she is the most appropriate choice. Consider also choosing a successor executor or trustee. Then, if the individual chosen cannot or will not serve, you have an alternative plan.