What to Know When Choosing an Executor or Trustee
November 21, 2016
Are you certain the family member you’ve chosen as executor has the time and know how to handle the challenges of your estate?
While any adult can serve as an executor or trustee to your estate, these roles come with specific duties and responsibilities that often make it better to call on a professional. Before choosing an executor or trustee, you should evaluate the fiduciary’s ability to handle the following skills and duties involved:
- Skills of an Executor: The executor must be able to manage the investments of the assets of the estate, handle other financial matters and address estate and income tax matters for the estate and trust.
- Duties of an Executor: An executor handles collecting assets, paying obligations of estate and debts of the decedent, resolving pending litigation, managing or selling a business and distributing assets outright to beneficiaries or to a trust for further management. A Trustee must also develop an investment program that will allow the family to continue living and follow the terms of the trust. Except where the trust prohibits distributions of principal or income, discretionary determinations by the Trustee will be required for distributions, which requires consideration of funds available, needs of beneficiaries and the intention of the estate owner as expressed in the trust document.
As complexities of assets and estate develop, it may be appropriate to consider a corporate fiduciary that is a bank or trust company. Corporate fiduciaries are engaged in the full time administration of trusts and estates. There are always staff members available, and affairs of the trust or estate can be administered regardless of health issues, incapacity, personal commitments, vacations, and business commitments. Internal controls of the corporate fiduciary protect the estate or trust against theft and there is insurance for any breach of duty. All staff actions are subject to review of federal regulators.
The most important consideration when selecting an executor or trustee is that you trust the party you choose. You should be confident that the party you select will work with you to carry out your wishes to preserve and protect assets for your beneficiaries. You may name more than one fiduciary to serve and it can be a mix of individuals and corporate trustee.
For smart advice that’s focused on your unique financial goals, contact Washington Trust Wealth Management at 800-582-1076, email us at [email protected].
Connect with a wealth advisor
No matter where you are in life, we can help. Get started with one of our experts today. Contact us at 800-582-1076 or submit an online form.
This document is intended as a broad overview of some of the services provided to certain types of Washington Trust Wealth Management clients. This material is presented solely for informational purposes, and nothing herein constitutes investment, legal, accounting, actuarial or tax advice. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. Please consult with a financial counselor, an attorney or tax professional regarding your specific financial, legal or tax situation. No recommendation or advice is being given in this presentation as to whether any investment or fund is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors, or markets identified and described were, or will be, profitable.
Any views or opinions expressed are those of Washington Trust Wealth Management and are subject to change based on product changes, market, and other conditions. All information is current as of the date of this material and is subject to change without notice. This document, and the information contained herein, is not, and does not constitute, a public or retail offer to buy, sell, or hold a security or a public or retail solicitation of an offer to buy, sell, or hold, any fund, units or shares of any fund, security or other instrument, or to participate in any investment strategy, or an offer to render any wealth management services. Past Performance is No Guarantee of Future Results.
It is important to remember that investing entails risk. Stock markets and investments in individual stocks are volatile and can decline significantly in response to issuer, market, economic, political, regulatory, geopolitical, and other conditions. Investments in foreign markets through issuers or currencies can involve greater risk and volatility than U.S. investments because of adverse market, economic, political, regulatory, geopolitical, or other conditions. Emerging markets can have less market structure, depth, and regulatory oversight and greater political, social, and economic instability than developed markets. Fixed Income investments, including floating rate bonds, involve risks such as interest rate risk, credit risk and market risk, including the possible loss of principal. Interest rate risk is the risk that interest rates will rise, causing bond prices to fall. The value of a portfolio will fluctuate based on market conditions and the value of the underlying securities. Diversification does not assure or guarantee better performance and cannot eliminate the risk of investment loss. Investors should contact a tax advisor regarding the suitability of tax-exempt investments in their portfolio.