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 fulfilled. Generally, you have two choices:

  1. Use the services of a financial institution’s trust department.
  2. Name a family member or friend.

Institutions offer the benefit of technical know-how and continuity over time and the benefits of these should not be understated. However, since they must adhere to established corporate policies, they charge fees, use conservative investment policies, and could possibly be less responsive to the needs of your beneficiaries.

Selecting a family member or trusted friend could potentially reduce or eliminate fees and add a personal touch to the process, but consider your choice carefully because the responsibilities are significant. Your executor needs to be adept at filing tax returns, making complex tax elections, and implementing investment strategies (but they may have limited knowledge of investments).

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