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WHAT SHOULD I LOOK FOR IN AN
EXECUTOR OR TRUSTEE?
The responsibility of a personal representative, such as an
Executor or Trustee, should not be understated.
Personal representatives are fiduciaries of the Testator (in the
case of a Last Will and Testament or a Testamentary
Trust),
or the Grantor (in the case of a Trust), and are
charged with executing the provisions contained in the requisite
document. A fiduciary is bound by law to exercise a high degree
of care when managing the property of another. Given the
significance of a personal representative and the standard of
conduct to which he or she must subscribe, it is imperative that
one carefully thinks about who should be appointed to act in
such capacity. Legal
Requirements The legal
requirements in Virginia for an Executor or Trustee are minimal.
An individual can serve as an Executor or Trustee, so long as he
or she is at least 18 years of age, and is legally competent. An
individual may also name two or more individuals to share the
responsibility for handling his or her affairs (each would be a
co-executor or a co-trustee). An individual can name a
corporation, such as a bank, as an Executor or Trustee, so long
as such corporation is authorized to conduct such business in
the Commonwealth of Virginia.
Personal Considerations
Being an Executor or Trustee carries
a great deal of responsibility. It is important for an
individual to consider both the capabilities of the person he or
she intends to appoint and the demands of the particular
position. Personal
Integrity of a Fiduciary
A fiduciary must be trusted to
handle the affairs that he or she will eventually control. There
is often little satisfactory recourse available if the acting
fiduciary fails to manage affairs in the manner prescribed. A
fiduciary should have undivided loyalty to the testator (or
grantor) when it comes to the execution of his or her duties. An
integral part of achieving a testator’s (or grantor’s) goals
resides in the Executor’s (or Trustee’s) understanding of those
goals. Often the appointment of a close friend, relative,
advisor, or someone who has maintained a longstanding
relationship with the testator (or grantor) is a sensible
choice. Capability to
Administer Affairs A
fiduciary must be capable of carrying out the wishes of the
testator (or grantor). Given the complex nature of the duties
associated with an Executor under a Last Will and Testament or a
Trustee under a trust agreement, a requisite knowledge of
financial matters, business transactions, or other matters may
be necessary to effectively manage the estate or trust. In some
cases, a bank or financial institution may be better equipped
than an individual to serve in such capacity. In the
alternative, if an individual is selected to oversee complicated
matters, he or she may have to seek legal counsel or other
professional advisors in order to carry out the wishes of the
testator (or grantor) and to serve effectively.
Ability to Serve
A fiduciary should be able to serve
whenever his or her services are required. When choosing a
fiduciary, the testator or grantor should consider the age,
health, geographic location, and intelligence of the prospective
fiduciary to determine whether he or she feels the intended
fiduciary will be able to serve effectively. An individual in
very poor health or at an advanced age may predecease the
testator (or grantor) or be too ill to serve at such time that
services are needed. A Last Will and Testament requiring complex
administration, or a trust agreement with an extended duration,
may require a tremendous investment of time and resources on the
part of the Executor or Trustee. Individuals who live outside of
the jurisdiction or who have obligations elsewhere may be unable
to serve. An individual should keep the personal situation of an
intended appointee in mind, so that he or she can assess any
difficulty or hardship that would be imposed on such appointee
by serving as a fiduciary. Prior to designating or appointing a
fiduciary, the testator or grantor should also determine whether
the prospective fiduciary is willing to serve in the desired
capacity both now and in the future.
Compensation Required
When selecting an Executor or
Trustee, or a successor Executor or Trustee, one should
investigate the amount of compensation required for the various
appointees. A corporate fiduciary may require a higher level of
compensation and may limit the types of estates or trusts it
will administer when compared with an individual appointee. An
individual should investigate the policies and fees of a
corporate fiduciary prior to making such appointment.
Selecting a fiduciary is very much a
balancing act done by an individual to determine what is
required from a fiduciary, who is capable to serve, who is (or
will be) able to serve, and who is willing to serve. Failing to
consider all of these items ahead of time increases the
likelihood that one’s affairs will not be handled in the manner
one desires. |
