February 25, 2020
Tagged As: Wealth Management
When creating an estate plan, many believe that the most important decision they will make is who to choose as their beneficiary. But there is one decision that may be just as important: Who will serve as your trustee or executor? Both trustees and executors are fiduciaries, meaning they have a strict legal duty to care for the administration of your estate for the greatest benefit to its beneficiaries.
Here are five things to consider when selecting a trustee or executor:
1. Choosing an individual or a corporate executor or trustee.
An individual trustee may be a sibling, a spouse, a child, or any trusted person. An example of a corporate trustee or executor may be your local bank with a trust and wealth management division.
2. An executor or trustee must act as a fiduciary.
Fiduciary is a legal term which means that your executor or trustee must take the interests of the trust, the estate, and the beneficiaries above their own personal interests. This is a serious duty and should be allocated with great care.
3. Carefully consider your executor and trustee’s duties.
Your executor or trustee must file all of your taxes, gather all of your assets, and distribute those assets. These tasks can take a year or longer to complete, so make sure that you name somebody who is up to the task.
4. You may name co-executors and co-trustees.
It is possible to name more than one person as your executor or trustee to share in the duties of administration. You may also mix and match by naming an individual and corporate trustee to work together.
5. Remember, an executor or trustee may decline to serve.
Simply naming somebody in your estate plan does not guarantee that they will have the ability to serve when the time comes. So we recommend that you share your plans with whoever you have named, and also it’s a good idea to have alternate executor or trustees named in case whoever you name is unable to serve when the time comes.
If you have any questions about working with Hills Bank on your Estate Plan, please contact one of our Wealth Management Officers online. You can also fill out our free financial analysis for a personalized response from our team.
Some trust products and IRA contributions/balances are not a deposit, not FDIC insured by any federal government agency, not guaranteed by the bank, and may go down in value.