1st Quarter 2023
Lawyer for Life
 

For most people, choosing an executor or trustee means choosing someone close to them – a family member or a friend. However, this often means their executor or trustee is also a beneficiary. But, will choosing a beneficiary create a conflict of interest?

 

The short answer is, the best way to avoid a conflict is to be as specific as possible in your instructions to your executor and beneficiaries.

 

An executor or trustee has a legal duty to manage the property and assets in the decedent’s estate for the benefit of the trust or estate beneficiaries. This means that while the executor/trustee should be compassionate, they must also act in an equal and unemotional manner toward every beneficiary.

 

A beneficiary, on the other hand, is often emotionally involved. Even those beneficiaries who are not concerned with the monetary aspect of their inheritance will likely be emotionally invested in the heirlooms of the estate. Sadly, many family feuds are sparked when siblings can’t agree on who gets sentimental items such as the family silver or great grandma’s engagement ring.

That is why adding as much clarity as possible to the terms of your estate will decrease the chances that the executor will be tempted to take advantage of their position. However, you may also want to consider naming a disinterested party as a trust advisor or co-executor to provide checks and balances throughout the administration process.

 

If you are a beneficiary who is also serving as an executor or trustee there are a few things you can do to ensure you keep your roles separate.

 

You can:

  • Contact a probate or estate planning attorney to mediate or oversee the process.
  • Involve an impartial appraiser if real property is involved.
  • Step down and hand the role over to a qualified and disinterested party if all else fails.

If you are concerned about naming an executor or trustee that is also beneficiary, or facing difficulty in serving in the role yourself, we can help you navigate the process in a fair and compassionate manner.
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It can be tempting to avoid the costs of creating an estate plan when your only significant asset is your home. Afterall, what’s the harm of simply putting your home in your child’s name to avoid probate and be done with it?

 

We hear this question more than you’d think at our office, and we almost always advise against it. The truth is, there are a number of reasons to keep your home in your own name, the biggest ones being property taxes and your child’s liabilities.

 

Other reasons include:

  • Is your relationship with your child as good as you think? Once the home is in their name they have no obligation to continue to let you live there.
  • Do you have more than one child? Putting your home in only one child’s name can cause a rift between siblings. Alternatively, if you put the home in the names of all your children, it can make the home more vulnerable to liabilities and paperwork errors.
  • Have you considered a Revocable Living Trust? A Revocable Living Trust can be a safer way to avoid probate. A Revocable Living Trust is flexible and reliable, and doesn’t have to be expensive. In fact, a Revocable Living Trust can actually save your family money in the long run!

Don’t make a mistake that could end up causing you to lose your home. Contact our office to discuss how we can help you protect your family and your assets from probate and liabilities.