Senior Living 3rdQuarter

SENIOR LIVING | ESTATE PLANNING
What Could Possibly Go Wrong? Choosing the Wrong Executor
Among my workshops my clients most
appreciate is the one called “Thrills, Chills, and
Probate-Related Horror.” The probate process
can seem deceptively simple to people who’ve
never been through it. But in probate, seemingly
minor errors or omissions can have major
consequences – delays that drag on not just for
months, but for years; signifi cant dollars that could
have made life more pleasant for the beneficiaries
expended on legal fees or court battles; and,
worst of all, permanently damaged relationships
among family members. So much can go wrong
that, as an estate-planning attorney, I’m passionate
about educating the unwary about the pitfalls that
surround the probate process.
By Claudia Pringles, Esq.
Among the most common source of problems in probate
is the will-maker’s choice of executor – or, rather, the process
the will-maker used to make that choice.
First, let’s clarify some of the terminology. “Probate” is
the court-supervised process of determining the final destination
of the assets of a person who has passed away, such as
finding the deceased person’s assets and determining their
value; paying the deceased’s outstanding debts and taxes;
identifying the rightful beneficiaries and ensuring they
receive the amount due them. The driver of the probate train
is the Executor, who is nominated for this office in the will of
the deceased, then formally appointed by the probate judge
as the probate process begins.
WHAT DOES AN EXECUTOR DO?
The Executor is legally responsible for the many tasks
that make up the probate process. He/she must understand
probate law well enough to be able to comply with it yet
have enough humility to get expert help (paid for out of the
estate) regarding legal and/or financial areas as needed. The
Executor is responsible for filing a variety of documents
with the court properly and on time; for all communications
regarding the affairs of the deceased and the probate process;
for keeping excellent records of work performed and
information gathered, including detailed financial records.
The Executor must also adopt an appropriate, respectful
demeanor when dealing with the probate judge and other
court officials. Given the many responsibilities that come
with this office, a good Executor comes supplied with good
organizational skills and a great deal of patience.
Executors are nominated in the Last Will and Testament
of the person who passed away and formally appointed by a
probate judge as part of the probate process.
CHOOSING AN EXECUTOR
Who makes a good executor? An executor has one job:
to lead the charge with probating your estate through the
court while remaining loyal to your wishes and being fair
to your beneficiaries. As the list of duties above suggests, a
good executor is someone who is organized, fair-minded,
responsible, and has the time to do the work.
It’s not uncommon for clients to walk into their estateplanning
attorney’s office with the assumption that they
had to finish a self-imposed homework assignment before
they’ve even said “Hello.” More often than not, new clients
come to my estate-planning practice with a list assigning
individuals to key estate-planning roles from Executor to
Trustee. Almost without fail, the roles will be assigned to
their children, and will be assigned by birth order, from
eldest to youngest, without regard to the individual’s
strengths, weaknesses, or willingness to undertake their assigned
job. It’s as if they were living in Downton Abbey, with
the rules of primogeniture in force.
Let’s take a fictional family, Mr. and Mrs. Traditional. The
Traditionals have three children: Peter the Ph.D. Physics
Professor, Dana the Doctor, and Eddie the Electrician. The
Traditionals announce they’ve decided to name Peter the
Executor, Peter as their alternate agent for Powers of Attorney
and Advance Directives, and Peter as Successor Trustee.
AS THE PROBATE TURNS...
Never mind the wisdom, much less the fairness, of asking
one person to do all these roles, which would likely occur
close in time. Peter could find himself as: the agent under
his incapacitated parent’s power of attorney and Advance
Directives; the trustee of their trust; and, after the parents’
death, the executor.
Back at the planning stage, would Peter make a good
choice for executor?
As a physicist with a specialization in black hole theory,
Peter is surely smart enough to figure out how to do probate.
His parents admit, however, that Peter tends to be
arrogant, thinks he has all the answers, is unlikely to ask
for help, and would refuse
to step down from the role
of Executor no matter how
overwhelmed he was nor
how poorly or slowly he
performed the job. While
Peter has infinite patience
calculating Absolute v.
Apparent Magnitude, with
other human beings – not so
much. He doesn’t get along
well with his family members
– especially his siblings.
The Traditionals’ secondeldest
child, Dana, also has
some characteristics that
may not be ideal for an
executor. Dana is not financially
responsible and lives
way above his means. He
struggles with keeping his
finances organized and paying
bills on a timely basis. As
one of the most important
responsibilities an executor
has is managing the finances of the decedent, including
clear, detailed, accurate record-keeping and the timely
paying of bills, increasing the amount of such responsibility
Dana must handle will almost certainly overwhelm him.
Finally, there is Eddie. Eddie has been an electrician for
20 years. He runs his own successful business, including
managing its finances. He deals with many customers and
other professionals and has good personal skills. He has
been a keen observer of the family drama triggered by Peter
and Dana, and has managed to remain on cordial terms with
everyone while staying out of the fray.
If the law required the Traditionals to select one of their
children as their Executor, clearly the youngest, Eddie, would
be the best choice. But the law has no such requirement. And
given his desire to stay as far away from family drama as possible,
Eddie might prefer not to serve as Executor.
Knowing this, the Traditionals begin considering a wide
variety of other people well suited to the role – other family
members and friends, or professionals such as attorneys or
accountants. But this time, they base their choice for each
role on how well any individual’s skill set and temperament
match the needs of the job.
Choosing your executor and other persons who will
play key roles in managing your assets can be a far more
important – and more challenging! – aspect of the estateplanning
process than deciding who gets Grandma’s pearls
or the grand piano. Don’t feel you need to have made these
decisions prior to meeting with your estate-planning attorney,
who’ll be able to help you identify objectively persons
well suited to these demanding roles.
Claudia Pringles is an estate planning attorney based in
Montpelier, Vermont. She can be reached at 802-223-0600 or
via her website at www.EstatePlanningVermont.com.
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Montpelier, VT 05602
802-223-1617
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