Appointing Successor Trustees

[lem1955]

We have four grown children and three young adult grandchildren. There are currently squabbles (okay, more serious than squabbles) between the two oldest children who are also the two most capable of being executors and trustees of our estate. We don't want to force them to work together or put one of them over the other as successor trustee. It's possible the oldest grandchild would be willing and able to be our successor trustee but keeping the job outside of the family might be best. Who have you appointed successor trustee if you have decided not to make a family member executor and trustee? What is a reasonable fee for an outsider to charge for executing and estate?

 

[OldShooter]

... keeping the job outside of the family might be best. Who have you appointed successor trustee if you have decided not to make a family member executor and trustee? ...

You are wise. In our case, our attorney is quite a bit younger than we are and working in a good firm. She or her firm will be our executor. Schwab will be trustee for the testamentary trusts that our estate plan sets up.

You might want to look into the "trust protector" job too. I believe it exists under many but not all state laws. DW has a younger friend who is listed as trust protector for our trusts. Among other things, she has the right to replace the trustee(s) if she deems it to be necessary.

 

[pacergal]

Both of our kids are equal successor trustees, they either get along and work things out, or they end up giving any inheritance to a lawyer. I believe they are smarter than that.

To be honest, if I was that concerned about my kids that I considered a new trustee, I probably would have a meeting with them. (Actually, I would sit their a$$e$ down and bonk their heads together, possibly threaten to disinherit--I am that kind of Mom).

Sorry your family is going through a situation like that.

 

[Slim11]

Make the most quilified the trustee. My aunt used a lawyer, then because she moved later in life we needed another lawyer in that state. Between the two, I did most of the work. They each knew thier job in there state but not the other. And I still dont think things were filled corectly. After it settles and I get the paperwork , I may have to have my accountant look over stuff to make sure it was corectly done and to see if I individuality can ajust my taxes accordingly.

 

[Badger]

We have four grown children and three young adult grandchildren. There are currently squabbles (okay, more serious than squabbles) between the two oldest children who are also the two most capable of being executors and trustees of our estate. We don't want to force them to work together or put one of them over the other as successor trustee. It's possible the oldest grandchild would be willing and able to be our successor trustee but keeping the job outside of the family might be best. Who have you appointed successor trustee if you have decided not to make a family member executor and trustee? What is a reasonable fee for an outsider to charge for executing and estate?

I will be interested in reading some of the responses. My older brother (by 2 yrs) was executor of the estate and created a number of problems including tapping into my parents estate (mainly their retirement savings) for personal distributions to his grown children and donations to a charity in which he was on their board. This was while my mother was still alive but in assisted living and after he had her ruled incompetent. All of this was expressly contrary to my parents wishes as well as identified in the trust. I cost me and another sibling lawyers fees to eventually correct this. I haven't talked to or seen him in 13 years. No bid loss. It would have been better had the lawyer who wrote the trust had been executor.

Cheers!

 

[yclipse]

My usual advice to clients is to avoid multiple trustees or executors. Pick one trusted person to make the decisions. If there are reasons not to use a family member, there are corporate trustees who are there for that purpose.

 

[ncbill]

One you trust or pay 1-3% to a professional.

 

[lem1955]

Both of our kids are equal successor trustees, they either get along and work things out, or they end up giving any inheritance to a lawyer. I believe they are smarter than that.

To be honest, if I was that concerned about my kids that I considered a new trustee, I probably would have a meeting with them. (Actually, I would sit their a$$e$ down and bonk their heads together, possibly threaten to disinherit--I am that kind of Mom).

Sorry your family is going through a situation like that.

Thanks all for your responses. Pacergal, we never imagined we would be in this situation. I wish a bonk heads session could fix it, but I think enough damage has been done that the two oldest will have nothing to do with each other, at least for now. I just looked into the cost for a professional Trustee org to process a $5M estate ~ $107,000! Yikes. I think we will have to have a conversation with the two to find out if they can work together enough to avoid that expense. (We would make only one the executor. But we need to make sure she will be fair to the others.) Hopefully we aren't close to the need for that service and there is time for tempers to cool and healing to happen.

 

[Slim11]

Its a lot, but so is the work. They have to file tour taxes and make sure all the loose ends are tied up. Plus they will have to deal with the estate, and the executor. So maybe make one executor of the estate and the other trustee, that way they will need to work together.

 

[OldShooter]

Things are a little fuzzy here. The person that handles an estate is an "executor." The executor's role ends when the estate is closed. If the result of that estate is creation of one or more continuing trusts, then the responsible person for each is a "trustee." The trustee's role ends when and if the trust ends.

If a trustee resigns or is removed, the new trustee is called a "successor trustee." There should be language in a trust that deals with replacing a trustee, both reasons to do so and procedures to follow. This will all be up to the grantor to specify, with assistance from an experienced specialist attorney. As I mentioned above, there may be a "trust protector" involved with this.

 

[Route246]

We don't have this problem but if we detected any possibility, however remote, that siblings would be in conflict I would write some very strict conditions in our will, such as any disagreements that happen when we are dead (clearly specified in legalese to mean that if lawyers are involved) will result in donating the entire estate to a charity. It would have to be a very chilling outcome if anyone decided to pull that ripcord. It is far more reassuring that a charity got the goods instead of attorneys. If you raise children that have self-destructive tendencies then you need to make one final decision to make sure your favorite charity benefits. It ends there.

A classmate from college is going through this now. Their father's estate has been tied up for 4 years and attorneys from 3 siblings are having a field day whittling down the estate (multi millions when started, much less now) with no end in sight. This will end when the estate is depleted and the attorneys simultaneously resign. Their father died without a will. All three attorneys are silently conspiring on this, it makes no sense. My classmate has proposed multiple times to just chop this up 4 ways (1 sibling does not have an attorney), chop up what is left and all of the sniping about this or that be forgotten. $1 million later in attorney's fees and they are still fighting.

It shows that absolutely money corrupts absolutely. BTW, we only have one son so he gets everything.

 

[lem1955]

Its a lot, but so is the work. They have to file tour taxes and make sure all the loose ends are tied up. Plus they will have to deal with the estate, and the executor. So maybe make one executor of the estate and the other trustee, that way they will need to work together.

Yes, I was the trustee for my father's Trust that is 98% finished. I get along well with my sister who has less resources than me, so I took a small fee about .2% for administering the Trust. The lawyer told me that was very generous on my part, but I was able to do the work and learned quite a bit doing it.

My sister and I didn't need an executor. No one was assigned that role. If every asset is in the Trust, I don't think you need an executor. Am I wrong?

 

[Slim11]

Things are a little fuzzy here. The person that handles an estate is an "executor." The executor's role ends when the estate is closed. If the result of that estate is creation of one or more continuing trusts, then the responsible person for each is a "trustee." The trustee's role ends when and if the trust ends.

Im my experience, the estate is just the belongings and whatever isnt in the trust. So maybe a curent bank account. The executor of the estate really has no power in the trust if they are not trusteee. So, the estate is seprate from the trust. You can have everything go into the trust if you want to. The executor will take care of the personal stuff. The trustee will track down the assets in the trust, transfer them to thier accounts and payput after all expenses are paid out. We are sort of saying the same thing, except that the trust wasnt created by the estate, it was a seprate entity. In my case the estate closed before the trust, and the executors roll was done. This may be diffrent depending on how you set up the trust and what type of trust it is. This is only my experience.

 

[Slim11]

Yes, I was the trustee for my father's Trust that is 98% finished. I get along well with my sister who has less resources than me, so I took a small fee about .2% for administering the Trust. The lawyer told me that was very generous on my part, but I was able to do the work and learned quite a bit doing it.

My sister and I didn't need an executor. No one was assigned that role. If every asset is in the Trust, I don't think you need an executor. Am I wrong?

That was good of you. The estate should have an executor, if every asset was in the trust then every item is supost to be valued, in case of taxes. This is less important if you are direct descendents. My case was an aunt, and my state has a inheradance tax. In that case everything is supost to be apprased. If you have executor, and a larger family, its easier to assign personel item to people, like who gets the fine china, silverware etc. Or does it get sold and put into the estate. The assets may all be in the trust, and they can be assigned to people. This may be more work and have tax implications. If uncle joe get the siver, that silver grts appraised and maybe taxed. If you as executor give uncle joe the silverware , no one knows.

 

[Slim11]

And I should have ended, it all depends, what is good for one is not good for everyone. The state your in, the people who recive the inheradance, it all has weight on what ones does. I am rethinking some of the stuff , for myself after seeing how some money got wasted. Iras that went to neices and nephews that got walloped in taxes, when donations came out of the trust. Unfortunately, its hard to predict and prepare for everything. But we try , thats why I am here, to get diffrent perspectives.

 

[OldShooter]

In my experience, the estate is just the belongings and whatever isnt in the trust. ...This may be diffrent depending on how you set up the trust and what type of trust it is. ...

Yes, it varies quite a bit. Probably the minority of estates have any trusts at all. Where there is a rev trust (aka "living" trust) it becomes an irrev trust on the grantor's death. From that point, the trust document governs those assets. In our case that irrev trust does not last very long, as the estate plan creates four new irrev trusts, one for DS, one each educational trust for two grandkids and a special-needs trust for grand #3. Do not try this at home.

 

[Slim11]

Ill agree old. I still havent set anything up that I like. After going through my ( still ongoing) my Aunts estate and trust, I dont trust anyone. So maybe thats a good thing. As I am thinging about it, my advise would to pay for an outside person to do it. So , just thinking back, people who were siblings to me, when my Aunt got a bit senile, started changing things. So accounts that were not owned by the estate passed directly to them. They also rewrote the will getting the house, not knowing ot was owned by the trust. But they also had an unsigned letter drawn up that would have desolved the trust. If that happened, they would have scamed everything. So, money, especially in larger amounts can corrupt even the best of us.

 

[street]

Both of our kids are equal successor trustees, they either get along and work things out, or they end up giving any inheritance to a lawyer. I believe they are smarter than that.

To be honest, if I was that concerned about my kids that I considered a new trustee, I probably would have a meeting with them. (Actually, I would sit their a$$e$ down and bonk their heads together, possibly threaten to disinherit--I am that kind of Mom).

Sorry your family is going through a situation like that.

This is what I would do also.

 

[Dash man]

This is what I would do also.

We chose Schwab Trust Company as trustee and our attorney as a Trust Protector who has the power to fire the trustee if they’re not following our wishes. The boys are co executors for things not in the trust.