Choosing wisely when assigning the key roles of estate administration
The push and pull of administering an estate and faithfully carrying out a deceased loved one's wishes serve as a poignant subplot of the new movie, "The Ultimate Life.'' In the film, the billionaire family patriarch chooses wisely in selecting a grandson with a good heart who'll see that the vast fortune becomes a force for good. But to do so, the young executor and family foundation trustee will have to fend off his greedy extended family.
Scaringi Law attorney Melanie Walz Scaringi, who focuses on estate law, doesn't need to go to a movie theater to witness the drama that can surround choosing the right person to act as executor or trustee for an estate.
She's experienced the ugliness, bitterness and backbiting when the wrong person is thrust into these all-important roles.
"You really need a fair-minded person to carry out the issues set forth in an estate," Scaringi explains. "The person you select should be someone who will do what you want them to do -- not what they want to do."
After all, you've spent the time, energy and effort to painstakingly plan your estate. Why not select the person with the skills, temperament and abilities to carry it out according to your wishes?
The birth order fallacy
Often, parents leave this important choice to the mere happenstance of birth order, with the first-born shoehorned into the role of executor or trustee - even if this person isn't best-suited for the even-handed and fair-minded role.
"A lot of people come in who feel birth order should dictate the choice of fiduciary," Scaringi says, using the generic legal term for executor or trustee of an estate or foundation.
"Really, that should not be the only deciding factor," she says. "Frankly, I don't think that is of any importance, from my perspective. You should have a person who would be fair, just, reasonable and thoughtful. A person who would actually carry out the desires of the individual writing the will."
Indeed most parents, if asked to ponder this, know who would be best-suited for the role of executor. Naming the right person can be a simple matter of setting aside overblown worries of hurt feelings.
"Oftentimes, I think parents know," Scaringi allows. "If I ask parents who they would name as an executor, they typically give me birth order first. But if I follow up and ask them who would be fair and just with his or her siblings, there can be a different answer."
Indeed, there's no rule that an executor has to be a family member at all, especially when the estate is complicated, involving matters of guardianship of minors or disabled individuals, or the duties of overseeing a charitable trust or family foundation.
Is your choice up to the tasks at hand?
"You have to look at what the person is going to do," Scaringi advises. "I don't necessarily think it is always appropriate to have a family member. It can be a best friend or someone else."
In the Hollywood movie, which caught Scaringi's eye, the wily, wise billionaire goes down the list of his own children, ruling each one out on the basic test of whether they'd follow his wishes. Other criteria to consider are whether a candidate could handle the job.
"There are terrific people who have no organizational skills and no ability to follow through with things," Scaringi says. "If they are a disaster; they're a disaster. There are a lot of unspoken truths in a family, but everyone knows them."
And the truth when it comes to estate law is this: There's nothing uglier or nastier than an all-out family feud over a deceased parent's possessions.
Picking the right executor can head this off before it ever erupts.
The $40,000 legal fight over a worthless necklace
"Is it worth sacrificing relationships among siblings?" asks Scaringi. "When dividing up personal property, sentimental value is at play and there is not a way to truly equalize this. It is the executor who is determining what a fair distribution of personal property is."
So choose wisely when naming that executor. Otherwise, your family could become lore in legal circles, just like the pair of warring siblings who each spent $20,000 in legal fees battling over their father's virtually worthless rope necklace. The necklace, adorned with a shark's tooth, couldn't have been worth more than $3, Scaringi says, shaking her head.
"But that was the necklace that their father wore every day, and he didn't specify [who should get it]," she adds. "There is always some discretion, and these are the things the executor will decide."
Hence, the high importance of making a wise decision when selecting one.
To learn more about how Scaringi& Scaringi P.C. attorney Melanie Walz Scaringi can help you, call her toll free at 866-643-7036 or email her at firstname.lastname@example.org