Choosing Your Executor: Picking the Right Person to Carry Out Your Wishes

[00:00:00] Atty. James Jones: Welcome to Legacy Talk. I’m your host, James Jones. I’m an estate planning and probate attorney in Tacoma, Washington. I’ve been practicing for over 20 years, and my main practice areas include estate planning, probate, and estate administration. On Legacy Talk, we discuss topics surrounding families and estates.

[00:00:22] Estate planning is often a confusing and complicated topic, but my goal with this podcast is to make it accessible and understandable to those who need it. So, if this is something that interests you, I’d appreciate it if you click the subscribe button and like this episode so that we can follow along as we break down the barriers to estate planning.

[00:00:42] I’m excited to get to today’s topic. Today’s topic is Choosing Your Executor: Picking The Right Person To Carry Out Your Wishes. Because selecting the right executor or trustee for your estate plan is one of the most important decisions you’ll make when creating that [00:01:00] plan. So, on today’s show, we’re talking about Choosing Your Executor: Picking The Right Person To Carry Out Your Wishes.

[00:01:05] So, let’s get to it. Peace of mind, ensuring that your wishes are carried out. Making certain that your friends and family and favorite organizations are taken care of when you are no longer around. These are some of the main reasons why we do our estate plans. We want all of these things to happen, but when we’re not around anymore, we need to make sure that we’ve selected an executor or trustee who will make sure that these things are taken care of.

[00:01:30] Selecting an executor or trustee for your estate is one of the most, if not the most important decisions that you will make when you’re putting your estate plan together. This person carries out your wishes, deals with your assets, deals with your creditors, coordinates with your beneficiaries, and all of those things, right?

[00:01:50] The executor makes sure that the plan that you put in place is carried out as you intended the way that you designed it to be carried out. We’ve often in previous [00:02:00] episodes of this podcast talked about how an estate plan is a system, and the executor is the person who runs that system, right? So, choosing the person to run the system is key and essential part of putting your estate plan together is selecting that executor.

[00:02:16] So, today we’re going to be talking about 10 key components or factors that you should look for or consider when selecting an executor or trustee for your estate plan. And I might go back and forth on this saying executor or trustee.

[00:02:32] An executor is typically someone that administers a will. A trustee is typically someone that administers a trust. They basically are the same job in different settings. So, I may interchange trustee or executor throughout this episode, they’re basically the same thing. So, when you’re thinking about trustees, you want to think about the same things as when you’re thinking about an executor, little disclaimer there.

[00:02:54] So, 10 factors to consider when we’re selecting that executor person for our estate plan is what we’re [00:03:00] talking about today. And number one is trustworthiness and integrity. The executor that you select should be someone with complete honesty, complete integrity. When someone’s not looking, they’re still doing what’s right, right?

[00:03:14] When they make a mistake, they let you know, right? Everything is above board. Their reputation is exquisite, right? When people think of honesty and stalwart and integrity, this is the person that they think about, this is the name that comes to mind. Okay? So, their reputation should be good, they should have a history of making right decisions, right?

[00:03:39] And being honest in their dealings and having integrity with regard to how they deal with other people, with how they deal with assets, and with how they deal with something that’s been entrusted with them, right? They’re going to take it seriously, that’s going to mean that it’s on them if it goes wrong, right?

[00:03:57] They’re going to take the responsibility to make sure [00:04:00] that the things that they’re doing are correct and the things that they’re asked to do are carried out. Okay? So, we want to make sure that their integrity and honesty are, you know, second to none. Just because this person has a fiduciary relationship, which means whenever an executor or a trustee is appointed in an estate, they have what’s called a fiduciary relationship with the beneficiaries.

[00:04:24] That means everything that they do is in the best interests of the beneficiaries, right? They carry out the estate in the best interests of the beneficiaries. They invest, they sell, they distribute in the best interests of the beneficiaries, they negotiate with creditors in the best interests of the beneficiaries. And in order to do that properly, this person has to have integrity and be honest. So, that’s number one, honest and trustworthiness, integrity, honesty, sort of all in one.

[00:04:55] Number two, organizational skill. Managing an [00:05:00] estate is not easy, there’s significant paperwork, there’s deadlines that you have to keep track of, there’s different institutions that are being dealt with different banks, different types of assets. The executor that you put in place should be well organized and be capable of handling administrative tasks easily.

[00:05:18] There’s a lot of administration in administering a state, same word, yeah. So, we want to make sure that the person we put in place is organized, that they’re not completely scatterbrained, right? We want to make sure that they keep records, they track their expenses, they track what’s been, what’s come in, what’s gone out, right?

[00:05:40] They track time, they track when they pay people that are working for the estate. Right? When they make distributions to beneficiaries they know, when there’s amount to be distributed, they know what that amount is, their accountings are exquisite, I use that word again.

[00:05:56] Their inventories are precise of the assets [00:06:00] of the estate and so they’re organized, right? They keep a binder, they keep a ledger, they’ve always got it with them, you know? The best clients that are executors that I have are the ones that come in with a big binder or a big like folding file or briefcase full of stuff, right? That they’ve organized and that they’ve kept straight. So organizational skill is a significant thing to look for in selecting an executor.

[00:06:28] Number three, financial knowledge and responsibility. This executor is responsible for managing and distributing assets. Sometimes they’re going to have to make a decision with regard to making an investment, right?

[00:06:42] Sometimes they’re going to have to decide between, you know, a simple investment or one that’s maybe more growth oriented, right? They’re going to have to be able to understand, at least generally, how the stock market works, how banks work, what is interest, right? What’s a CD? What’s a money [00:07:00] market account?

[00:07:00] They should have an understanding of that kind of stuff ideally, and someone with that kind of understanding of financial matters can make sure that these financial dealings are dealt with properly. This person has a good history and usually a long history, ideally a long history of good financial decisions in their own life.

[00:07:20] They don’t have outrageous credit card debt, they haven’t filed bankruptcy before, that’s a thing. They haven’t, you know, made terrible investments and lost everything and You know, always are up and down, we don’t want that. They’ve got good credit ideally, that’s a good indicator of whether they’ve got good financial responsibility, track record, it’s a credit good, not that you have to check their credit, but you’d know, right?

[00:07:45] And you should know, and if you want to ask them, you know, what’s your credit score. So, financial responsibility, financial knowledge are a significant factor. And it’s not like you have to have a finance degree or be a financial advisor, [00:08:00] you know, anything like that, that’s not what I’m saying here.

[00:08:02] It’s just someone that knows how to keep a budget, balance a checkbook, you know, keep track of expenses, know when bills are due, then pay them on time. That’s really what I’m talking about. I’m not talking about some person that knows how to trade options and you know, always picks the market the right way, that’s not what I’m talking about.

[00:08:20] I’m talking about fundamental budgeting, paying on time, tracking expenses and income, that’s the kind of thing that we’re looking for. If they’re good at trading options, that’s fine too, but you probably don’t want them trading options in an estate plan. Probably not, because they’re sometimes a little bit risky.

[00:08:37] Number four, and this is super important. Are they available to do it? And are they committed? Availability and commitment go a long way in having someone be a successful executor or trustee. Serving as an executor is time consuming. In a probate case, this case could be going on for, on average, a probate case is probably going to be [00:09:00] 6 to 12 months, on average.

[00:09:02] Sometimes longer, you know, I’ve got many estates that are longer than a year, two years, there’s complicated assets, they’re selling properties. Sometimes they have properties in different states, different types of assets, different advisors, different accounts everywhere. And sometimes it takes a while to get the assets administered.

[00:09:21] So, does this person have the time and commitment to that kind of a task? And to do it effectively, right. And to basically commit to dedicating a portion of their life, a portion of their time to help administer this estate. I’m not saying being an executor is a full time job, it’s not, it shouldn’t be.

[00:09:42] But it is something that you have to take some time for, it’s going to be a few hours a week, working on the weekends after work you might be dealing with expenses and ledgering and accountings and stuff like that.

[00:09:54] So, you have to have some time, this person has to have some time. They have to be available, and more [00:10:00] importantly, they have to be committed to the task because it’s sometimes arduous.

[00:10:03] It’s something that most people aren’t used to doing all the time, right? It’s something that doesn’t come around very often. And so, it’s something that you want to make sure that they have the time and commitment for.

[00:10:14] Number five, and these are in no particular order, by the way, they’re just an order of the way that they came out.

[00:10:22] Number five, communication skills, the executor will need to communicate effectively with creditors, with banks, with financial institutions, oftentimes realtors and most importantly, beneficiaries. They need to be able to communicate effectively with the people over which they have a fiduciary responsibility. Okay? It’s critical.

[00:10:47] So, someone that can communicate effectively, clearly, and also diplomatically is important. You don’t want some guy that, or person that is, I’m always [00:11:00] right, what I say goes, you listen to me, I’m going to make the decision. We don’t want that kind of person in charge as executor because they’re just going to cause problems with the beneficiaries and they’re probably not going to do things exactly right.

[00:11:14] And they’re going to be obstinate and they’re going to be put up barriers to communication and it’s going to be a mess and the beneficiaries are going to be unhappy and it could lead to legal action and things like that. It could lead to mismanagement because you’re so full of yourself that you don’t know if you’re doing something wrong, you don’t take advice well, you want to be able to communicate.

[00:11:35] Someone that can communicate, be the adult in the room, right? Not the one that has an ego that needs to be fueled and fed, you want someone that can communicate clearly, sometimes, you know, softly, right? Someone with empathy, right? Sometimes sympathy, but if they don’t have sympathy, that they’re at least empathetic to the situation, right?

[00:11:59] That they [00:12:00] can understand where someone’s coming from, like a beneficiary who lost a parent or a brother or whatever, right? A friend. And why am I not getting updates? What’s taking so long? They can take these questions with grace and answer with empathy, with sympathy, you know, we want to make sure that person has the capacity for that and can communicate clearly otherwise, there’s problems.

[00:12:22] Lack of communication is one of the biggest reasons why executors get lawsuits or contests filed against them or motions to remove them or something like that. Number one reason is they’re not telling the beneficiaries what’s going on.

[00:12:34] Number six, familiarity with your wishes. The executor should understand and be willing to carry out your wishes as you have them stated and outlined in your will or trust. Open communication with that executor or trustee before you pass is something that is encouraged and it’s a good idea so that person knows what you’re thinking, right?

[00:12:55] So, that they know what you were intending with whatever provision, right? [00:13:00] Usually a good estate plan is going to have the provisions dialed in. It’s going to have if there’s a questionable thing or something that’s novel maybe in your estate plan that you said well. You know, you want to do one thing for one of the kids but not for the other kids or give them a little bit more money based on a formula or something, that formula better be tight, right?

[00:13:20] And your executor should know how to interpret that formula and know why you did it ideally, right? Because sometimes there’s going to be questions there that could cause hard feelings. So, being familiar with what you’re intending to do and maybe have a discussion with them. A lot of the times, you know, it’s not a legally binding document, but a lot of the time I’ll recommend clients draft a letter of intent for their executor and for their family, that basically says, this is what I was thinking when I drafted this document. This is really what I want to have happen.

[00:13:49] And so, that goes a long way to that sort of communication after the estate plan is done and that they’ve said, yeah, I’ll be executor. That would be good to have a meeting, and so they have that familiarity [00:14:00] with your wishes.

[00:14:01] Number seven, this is not essential, but it’s on the list, legal and procedural knowledge. It’s not mandatory that the executor knows how to read a case, read statutes, but they’ve done it before. That’s not a prerequisite, prior experience is a bonus.

[00:14:16] Sometimes you’ll get people that they’re the resident executor for the family, they’ve done, they did dads, they did moms, and then they did Uncle Bob’s, you know what I mean? There’s people like that out there, but that’s not prerequisite, sometimes it’s helpful, not always, because they could be that person that nobody likes.

[00:14:34] That I was talking about that can’t communicate well, so, a basic understanding of the procedure is nice and something that’s critical, this person doesn’t have to know all the laws and all the statutes and all the requirements, but they should be comfortable with getting legal advice from experts. So, when I typically, you know, I’m an attorney, so, all the cases that I deal with are with an attorney, right?

[00:14:59] The [00:15:00] ones where the executor is trying to do it on their own are very regularly unsuccessful. And so they need to be willing to hire professionals or experts to sort of help with that process and explain the legalities and the timelines and the requirements to administer in a state properly and basically reemphasize to that person, the significance of this and the issues if they do this or that, right, we want to make sure that they understand that there might be consequences if you do something wrong.

[00:15:33] So, you need to be very careful about making sure that everything that you do is above board, right? That honesty, integrity that we talked about before.

[00:15:42] Number eight, this is a super important one. Ability to handle conflict. A state distribution can sometimes lead to disputes and oftentimes leads to disputes among beneficiaries. Who guessed it? Did you guys guess that one? Oftentimes when there’s an estate, there’s conflicts with [00:16:00] beneficiaries. So, this executor, this goes back to communication as well, but it’s not just communication, right?

[00:16:06] An executor needs to be diplomatic and handle conflicts and disagreements in a positive way, they need to be able to talk somebody down probably. They need to be able to explain things clearly, then that’s back to communication, but they need to be able to, if there is a conflict, explain their position, right? And with logic and typically logical explanations, oftentimes, hopefully work, that’s not always the case, because logic isn’t always in everybody’s understanding or capacity to understand, unfortunately.

[00:16:40] So, but that person needs to be able to, quiet the room. Like I said, be the adult in the room. The person needs to be able to see the other side, this goes back to the empathy and sympathy thing. They need to be able to understand and use this understanding to resolve whatever conflict there might be, because there will be conflict great or small.

[00:16:58] Oftentimes they’re not huge [00:17:00] things and oftentimes they can be dealt with explanation and with patience and with honesty and integrity. And so, the ability to handle these conflicts without them becoming, I’m taking you to court conflicts, I’m getting you kicked off or removed by the court kind of conflicts, we don’t want that.

[00:17:18] It’s important to be able to manage those things, conflicts among beneficiaries or creditors or whomever, right? With grace. Okay?

[00:17:27] Number nine, geographic proximity. If you’re doing an estate with a will, if you’re administering an estate through probate through the courts, it’s ideal that the executor is local. And the reason why is because you probably have a house, all your personal properties here, right?

[00:17:44] So, it’s makes sense that the executor is local ideally so that they can deal with all the personal property. They can deal with realtors on site, they can inspect the property in person. A lot of the time the local banks are easier to deal [00:18:00] with in person than on the phone.

[00:18:02] If the executor that you select is from a different jurisdiction, different state, it’s a little bit more of a complicated process to get them appointed as an executor. It’s not impossible, I have a lot of clients in other states that are administering estates here in Washington. And, You know, we’ve sort of figured out how to do it.

[00:18:22] We know the people to send them to get things done. It’s a lot less hands on for them though. And in particular, personal property is a problem, there’s a lot more travel involved because they got to come out a few different times, usually. So, it’s ideal that they’re local, for a trustee that is also true.

[00:18:39] It’s a little simpler if they’re not local, when it’s a trust administration, cause it’s not going through the courts. And so, there’s not as many hoops to jump through as far as getting an agent in state to accept service by mail and stuff like that. So, that’s an aside that’s not necessarily relevant, but geographic proximity, ideally it’s someone that’s local, at least within the same [00:19:00] state ideally, but it doesn’t have to be.

[00:19:02] If you don’t have anybody local, which is, like a lot of people, it’s not something to get too hung up on, but it’s something, if you have the opportunity to have someone local and they’re really good. A local person that might not be exactly as great as someone that’s out of the state, may be a better choice if they’re competent enough and they have the other financial acumen, they’re honest, they’re integrity. So, that’s number nine.

[00:19:21] Number 10. Willingness and capacity to serve. So, it’s not just about availability and commitment. It’s willingness and capacity too, right? And so we want to make sure that the person that we’re considering for executor is willing to take on that role. We want to make sure that executor who has significant responsibility is comfortable with the obligations that it entails.

[00:19:45] And we want to make sure that they have the capacity for it, right? A lot of these steps talk about capacity, really, honesty, financial responsibility, being able to communicate. Those lead to [00:20:00] compassion, those are like elements of being, having capacity to do this job.

[00:20:04] The other thing to consider too, is if you’re a younger couple or a middle aged couple even, and your kids are still minors and you’ve got, maybe your parents are still the ones that are named on your will or trust as the successor trustee or the executors.

[00:20:20] You want to make sure you’re watching that because if your parents are 80, do they have capacity anymore to do it? Do they have the stamina, the energy, the mental facility to do it? That’s something to consider, age and health of the executor is important.

[00:20:36] It’s a job that requires energy to do, and if you have someone that can’t move around. I’ve had clients over the years that the executor has been an older person or someone with health problems. So, that wasn’t easy for them to get around and it makes it a lot more complicated for them and for the beneficiaries.

[00:20:52] And it might be ideal to have someone that’s younger than you names. You don’t have to have someone that’s younger than you. Eventually you might, [00:21:00] if you live really long, right? You’re going to have somebody younger probably, but you want to make sure that they’re in good health, right?

[00:21:06] That they can fulfill their duties, they’re mentally capable of understanding the process, so that, they can execute your will, run that system that you set up effectively, right? We want to make sure they can run the thing and that they’re willing, right?

[00:21:21] So, that brings us to our story time for this episode.

[00:21:24] I’ve got one bad and one good story. Okay? I have a laundry list of bad ones, I could probably share. The bad story for today’s episode is, executor will call John, we’ve had a very complex estate, lots of real estate over two different states. Financial accounts, a will so it was going through probate. It wasn’t a trust, so there’s probate in Washington and there’s a probate in the other state.

[00:21:48] And this guy went through multiple attorneys, took years to administer this estate. He wasn’t great at taking advice of attorneys, he wasn’t great at communicating with [00:22:00] beneficiaries, he wasn’t great at managing the estate assets, and he used some of the money for personal expenses, a lot of the time he mixed personal or inherited funds with the state funds, which is a problem.

[00:22:13] Beneficiaries were unhappy, he was under constant pressure from opposing lawyers to provide inventories and accountings to beneficiaries, even to the point where they wanted to have him removed from the estate. And so, basically that’s someone that didn’t run things well. They were unorganized, they didn’t have financial knowledge, you know, with regards to how to handle different kinds of accounts, different kinds of assets.

[00:22:39] They weren’t great at taking advice from lawyers, they wanted to sort of run things their own way and didn’t matter what the lawyer told them. And so, that was an unsuccessful executor. And that’s the one that we don’t want, right? We don’t want somebody like that.

[00:22:53] We want someone that can take advice, clearly communicate, be organized, keep records, have capacity and [00:23:00] understanding, integrity and honesty, all these things that we talked about. So, that’s the bad, okay?

[00:23:04] And then the opposite is the good. A very similar estate, very complex assets, like specialized assets. The person that died had a house on a runway, so he was a pilot, he had planes, he had lots of different vehicles, he had a lot of complicated financial accounts.

[00:23:22] You had a hanger, you know, lots of different kinds of assets and specialized assets that require typically specialized realtors or sales people to sell, right? And it also requires a person, the buyer who’s going to be buying these properties needs to be someone that might use that.

[00:23:39] So, the buyer pool is much lower, but this person will name, we’ll call her Joan. Yeah she was the complete opposite of John, right? Super organized, she’s the kind that came into the office with the big expando folder full of all the things in order. She kept notes, she had questions that she wanted to go over every [00:24:00] time we met, she detailed everything on an inventory with precision.

[00:24:06] She kept all the records regarding the accounting, what’s coming into the estate, what’s going out, who’s gotten this, who’s gotten that. She was great about communicating with beneficiaries, not all of which were completely friendly to her, but she handled it, right? She could talk to them, and because she was so organized, and because she was so communicative with them and transparent.

[00:24:31] We should add transparency onto that communication, because this should be a transparent process, as a fiduciary, people that you’re working for should know what you’re doing for them. And so, this Joan was very transparent with all of our dealings.

[00:24:46] So, everybody knew exactly what came in, exactly what went out, exactly what everybody got under the will, and it was just a great experience. It didn’t take that long, less than a year, whereas John’s [00:25:00] took years and years to deal with. Joan’s took less than a year and it was similar kind of assets with even a more specialized pool of people that could be interested in buying these assets and it just went so smooth and it was like, those are always the best ones, right?

[00:25:16] Those are always the best ones when the clients come in and they’re carrying that box or that expando file. Like I said, to have the questions that keep notes that read the letters that you send to them, read the probate checklist that you send to them, get things in on time with regards to accountings and inventory.

[00:25:33] Those are the ones that are successful and that’s who you want to pick. That’s the kind of person that you want to pick, that’s the kind of person that you’re going to seek when you’re selecting that person. You’re going to look and seek for that person to sort of follow these different parameters that we’re looking at, these key factors.

[00:25:48] And that estate, like I said, it was like nine day difference. Everyone was happy, everyone got what they were supposed to get. There’s no question as to the way that Joan managed that estate. She [00:26:00] did it with complete honesty and integrity and everybody walked away happy, and that was it, right?

[00:26:06] That was it, they closed that chapter. It’s not something that draws on, right? The other thing people don’t consider with an estate when it is administered is, these people, the beneficiaries, most of the time lost a parent or a relative or friend, and they’re still getting over that.

[00:26:24] And if the executor is not taking them seriously, brushing off their requests for information, not clearly communicating with them, not proactively communicating, but reactively communicating, it’s miserable, and the beneficiaries take that grief that they’re already experiencing, and it just amplifies it, it multiplies it, and it’s just a terrible experience for them.

[00:26:51] And really, if you’re named executor, you want to make sure that communication is clear, the records and books are clear, and that you’re [00:27:00] not amplifying some beneficiaries grief, right?

[00:27:03] And when you’re selecting executors, make sure that there’s someone that can get things done. We want typically self-motivated people that can get things done with honesty, integrity in an organized way with the advice of counsel usually. And so, that’s really what we’re looking for, right?

[00:27:20] And so, I hope this was helpful for you when you’re thinking about it, but it really is that executor or trustee selection is one of the most important things, if not the most important thing that you do with your estate plan.

[00:27:32] So that’s it, that’s it for today’s episode. Thank you for listening to today’s episode of Legacy Talk.

[00:27:37] If you liked today’s episode and would like to learn more, please like, and subscribe for more great content.

[00:27:43] I’ve been your host, James Jones to your legacy.