Picking Executors and Trustees

Sometimes people ask what an executor and trustee. I don’t really have anything official on the responsibilities of trustees and executors and I think the actual day-to-day responsibilities of a trustee would vary a lot by family. North Carolina law says the executor role would normally be completed in about a year following death but it’s often extended and may be 2 years. The executor is responsible for figuring out what is titled in the name of the decedent and transferring the title to the proper heirs after paying all the decedent’s final bills. An accounting is filed with the probate court showing what assets were received into the estate and what assets were paid out. The executor can farm out a lot of this work to an accounting or law firm, but would be responsible for signing the forms the professionals prepared. The executor would probably also be required to do some legwork to close out the open bank accounts, etc.

People are weird, and there usually is some strange thing you have to deal with that is interesting. One man died with 12 dogs where I was executor and I had to find homes for them. I also had to figure out a way to get his ashes to Paris Island (he was a Marine drill instructor). Another decedent threw a bunch of old coins in coffee cans and I now have quite a coin collection I’ve got to figure out what to do with. In another estate, I had to get a locksmith to open a home safe. We were all curious what was stored in there since the jewelry was left all over the house. Turns out it was her marijuana stash. The executor and trustee role itself normally isn’t the problem with anyone serving in these roles. In my experience, some people can be a little surprised by the record keeping that is required, but the people that complain about being an executor or trustee are usually really complaining about dealing with the decedent’s family in dysfunctional situations.

For the trustee, this role continues for years depending on the purpose of the trust, the age of the children, etc. The trustee would normally want to review the investment performance with a broker, etc. have tax returns filed for the trust, and make decisions on what distributions should be made from the trust to the children. You will want someone that would meet with the children and know what was going on before making these decisions.

My standard trust documents normally provide that the people serving in these roles can be provided a fair hourly compensation. Also, since the people you are talking to don’t do this as a profession, there IRS rulings that it’s not their trade or business and no self-employment tax is due on the compensation.

This might not be what you are looking for, but I think it’s about the best answer anyone can give you. Hope it helps.

Categories: Estate Planning