Mallard Financial Partners

The Three Things Everyone In An Estate Planning Role Must Have

Nick Gaetani, CFP®, ChFC®, RICP® , Financial Advisor

It’s no secret that sorting out what will happen to your assets at the end of your life is one of the most stressful decisions you face in your life. It may involve life-changing dollar amounts and complicated family and relationship dynamics, which adds up to a lot of responsibility for those who carry out the roles of an estate plan. Obviously, that means when choosing people to fill these roles, you want to choose the right people. But, how can you know if you’re putting the right people in the right seats?

The good news is you don’t need to be an at-home expert on the mechanics of trusts or interpreting legalese, because you only need to know if these people have 3 things:

Time: This sounds obvious on its face, but in real-life scenarios it can be much murkier. Your son may be a doctor, which (probably) makes him super intelligent and capable. And he may be a loyal son and genuinely pledge to help you. But if he’s working 80 hours a week, he probably won’t have time to manage the investments for a trust account. And if he lives 1,500 miles away, it’s going to be tough for him to show up in court on the off chance that his role as an executor would require him to do so. Either of these scenarios would make it tough for your son to be effective, which could create feelings of guilt or failure. It’s important to look around you and be honest about who has the time to take on these things.

Will: For all the world, you may want your sister to be your executrix. You might think she’s a perfect fit: she’s got the technical chops from her career, she’ll have the time as a retiree and everyone in the family respects her. But, she may not want to do that. She may want to travel the world because she never could when she was working. She may be uncomfortable at the thought of refereeing between her two nephews precisely because they both think really highly of her and she doesn’t want to jeopardize that. She may also think her technical skills are far less applicable here than you do. The point is: it’s crucial to remember that what you are asking of these people is a massive undertaking and they have the right to say no. It may well be painful to hear, but if they don’t want the responsibility, it’s better that you know now while you can still find someone else of your choosing.

Ability: This one is unique to the role in question. Though it’s necessary for someone to be “organized” or “good with numbers”, it’s important to go a level deeper. Can a potential executor be persistent enough to follow up with different financial firms or utility companies multiple times? Can she keep a record of every interaction she has had with them to point out contradictory information or know who the point person is at each place? Can a potential trustee orient the investments in the portfolio so that they will produce whatever income or growth characteristics the trust prescribes? Can she keep track of all dividends and interest each quarter, make sure they’re set to go to cash and distribute them in the right proportions to each of the beneficiaries? If she can’t do those things, can he be trusted to interview financial advisory firms to find one who will do those things, and can she decipher the firm’s statements and reports to monitor them and ensure that they’re honoring the intent of the trust? All this – and much more – will be asked of them, so they must be capable.

To be sure, there are a few other things worth considering that are outside the scope of this article, such as family dynamics. Thinking carefully through these 3 things can go a long way towards making sure you have the right people in the right seats. Your loved ones will be grateful.