Executor, Trustee and Guardian:
The V.I.P.’s of Your Texas Estate Plan
When it comes to estate planning, talk usually focuses on asset distribution, planning for future generations, choices of how to structure a trust and even potential tax implications. And while it’s absolutely vital to discuss those issues and have a smart, strategic plan – a plan can only take you so far.
You can set sail with your course plotted and your favorite tropical destination chosen, but if the captain steers the ship in the wrong direction, you will not end up in the sunny paradise you looked forward to – at least not without a lot of time and expense. When you and your attorney craft an estate plan, part of that process will usually include selecting an Executor, Trustee and Guardian. They each serve as “captain” of your Estate Plan in different ways, each extremely important; they are the V.I.P.’s of your estate plan. To keep your plan on course, choose wisely.
This is the person who you grant legal authority to probate your Will and handle all matters pertaining to the distribution of your probate property. Ideally, this person lives in Texas, though the only residential requirement is that the individual you choose lives in the United States. Once the Will is probated, and the court finds the Will valid, the Independent Executor can now carry out the business of your estate. This business is going to be anything necessary to distribute your assets according to your stated wishes within your Will.
But let’s not forget – in the real world, this role usually isn’t all business. Ideally, this person will have the ability to manage with care any fragile family situations or disputes over assets. They will also know you and your wishes well enough to diplomatically navigate murky waters when an issue or asset isn’t written down in black and white – for example, when personal property items from a home are simply set to be divided among children and they are fighting over grandma’s heirloom quilt or dad’s military service medals.
A word about Texas’ Independent Administration: Texas has relieved a great burden on its citizens and the courts with the Independent Administration. If you don’t believe me – ask your friend or relative from California about their state’s probate process. However, as the saying goes – with great freedom , comes great responsibility. In other words, once your Will is given the court’s stamp of approval, your Independent Executor is given a lot of freedom in carrying out his/her duties. Don’t misunderstand – there is accountability, but it really depends on a beneficiary crying foul, and as you might imagine, if questions arise, it can be costly and painful to get answers. To avoid that possibility, select this V.I.P. with great care.
The Trustee is often the same person chosen as Executor, though that’s certainly not a requirement. And while the role of Executor is a relatively short position, a Trustee’s job can last decades. The Trustee’s primary job is to distribute trust assets to its named beneficiaries in accordance with the distribution method outlined within the trust. The Trustee will handle all financial transactions, including transferring title of any titled property designated as a trust asset.
Often, couples with younger children will establish trusts for their benefit; if the children were very young when the couple passed away, the time the trustee will need to manage funds for their benefit will be at a minimum 10 years but more likely up to two decades. And similar to the accountability of an Independent Executor, a Trustee’s is built into the Trustee/Beneficiary dynamic; the beneficiaries will have to enforce the Trustee’s fiduciary duties if ethical questions arise. Accordingly, this V.I.P. should be someone who you trust without question, who understands the goals of your trust, and who is committed to accepting the responsibility if and when the need arises.
Last, but in no way least, the Guardian. Your Will presents your opportunity to choose the person(s) that will care for your minor child(ren) if something happens to both parents. If you do not exercise your right to have a Will, not only are you forfeiting the right to plan the distribution of your assets – you’re giving away something that most parents would find even more important. It may not be an easy decision, but your silence means that court will have to make a determination of who would best care for your children – and with much less information than you have. You know the people that will love your children best, care for them best, and pass on your faith and values best. Don’t give this right away: this V.I.P. can make all the difference for your kids.
Hopefully this brief overview has impressed upon you the importance or your V.I.P.’s; captain your ship properly, and it should all be smooth sailing. If you have any questions or think it’s time to makes some updates to your estate plan, give us a call today!