After you have written your will and formulated your financial plan, you will need to select a competent executor and perhaps a trustee to ensure that your wishes are fulfilled. Generally, you have two choices:
- 1. Use the services of a financial institution’s trust department.
- 2. Name a family member or friend.
Institutions offer the benefit of technical know-how and continuity over time. However, since they must adhere to established corporate policies, they may charge high fees, use conservative investment policies, and be less responsive to the needs of your beneficiaries.
Selecting a family member or trusted friend may reduce or eliminate fees and add a personal touch to the process, but choose wisely because the responsibilities are significant. Your executor must be adept at filing tax returns, making complex tax elections, and implementing investment strategies.
Just because a family member is the oldest surviving sibling or is willing to serve does not mean he or she will be a good choice. A successor executor or trustee should also be chosen. That way, if the designated individual cannot or will not serve, you have an alternative plan.
