Choosing the right executor/trustee

Creating a will or trust is an important part of financial planning. Consider how the asset allocation of your retirement investments might change with age, perhaps being aggressive when you’re young and becoming more conservative as you get older. When you create your will as a young person with a growing family, your concerns are different from when you are older and evaluating your ability to retire.

For example, my first wife and I created wills that provided for each other if one of us died early, and to provide for our children if both of us died. In addition to assessing financial considerations, it required us to identify who would raise our children if we were both out of the picture. Fortunately, none of those circumstances occurred.

My second wife and I have created wills and trusts that protect each other. I am five years older than my wife, and women on average live longer than men. I will likely die before she does, so my will and trust take that into account. But the trusts also consider that we both have children from prior marriages. We want to make sure our assets are not comingled, ensuring that my wife’s children receive her financial legacy, and my children receive mine.

This sounds complicated, but it really isn’t. My wife and I keep our finances separate except for a joint checking account and a few credit cards. Our home is jointly owned with the right of the survivor to stay in the home. Eventually our children will receive the proceeds from the sale.

I served as executor and trustee to my father’s estate. My mother predeceased my father by five years, so he was executor and trustee of her estate. After my father died, I found that he had not completed the closure of my mother’s estate. For example, he continued to cash and deposit dividend checks made out to her after she died. I have no idea why the bank allowed this to happen, but it became my problem. To address the concerns of the local Clerk of Court, I re-opened my mother’s estate and transferred ownership of all holdings to my deceased father, then transferred those assets to the estate account I opened at the bank.

While I was married to my first wife, my mother-in-law and her husband asked if I was willing to be executor of their wills. I agreed and really didn’t think about it again. Fast forward many years:  I’m divorced from my first wife, and my former mother-in-law is dying of lung cancer. I was (and still am) close with the family, but my ex-wife and her siblings were surprised to discover that I was still the executor. I made one last visit to see my former mother-in-law before she died, and while there met with an attorney who created new wills that removed me as executor. I dodged a bullet on that one.

My message here is that “just” having a will (and perhaps a trust) doesn’t necessarily mean you have addressed everything. Or perhaps your circumstances have changed over time. Make sure you occasionally revisit your documents to ensure that they and your thought processes are aligned.