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  • Writer's pictureLee Roth

The Importance of Advice and a Professional Executor

Bird on a branch

I Have Changed My Mind . . .

Early in my career as a lawyer, I concluded that it did not make sense for most of the people who asked me to write wills for them to suggest that they consider someone other than their wife or children to serve as executor or trustee of their estate. Although that early advice is still reasonable in many cases, I have in more recent years come to the conclusion that an outsider, often a professional such as a lawyer or accountant, is a more appropriate person to fill that role, and it is worth the cost.

I have in the past several years had at least four examples of families that broke apart, and frankly were at each other's throats, because one member of the family was named as executor and one or more other family members felt that person acted inappropriately. In one case, delays were substantial because the named executor deferred to someone outside of the family who did not act in a neutral way in terms of how things were handled. In another case, one or more family members felt that the executor acted more in her own interest then in that of the collective beneficiaries. In another example, a family member who took on the role of executor demonstrated their incompetence to manage financial affairs. I could go on and on with similar examples.

Professional as Executor or Trustee

My inclination is to now suggest, in some circumstances, that a professional be named to serve as executor or trustee. That inclination has been reconfirmed in my recent reading of Thomas Stanley's book, © 1996, “The Millionaire Next Door.” He quotes from one of his examples as to the outlook of a Mr. Graham, one of the people he interviewed.

When selecting the executors of his own estate, Mr. Graham chose an attorney who was an old friend. He discovered that “it’s better for the children to be mad at the arbitrator than with each other.” (p. 200).

Stanley points out in his book that there is more to being a successful estate attorney than just providing legal advice. I fully agree. I go further: advice in relation to an estate plan is more important than the drafting of a document. He says that the more successful estate attorney also acts as mentor, counselor, and family advisor to their clients and their heirs. These attorneys have to be especially able to communicate with and to meet the needs of the widows and widowers who are often their clients. Within the married couple population, almost all husbands and wives intend to leave their estates to their spouses, since a husband or wife can inherit his or her spouse’s estate without paying an estate tax. This unlimited marital deduction essentially postpones payment of estate taxes, if any, until the death of the second spouse.

In the typical Hunterdon and neighboring county populations, the husband who passes away at the age of seventy-five and a half years leaves behind a widow who is two years younger than he was at the time of death. His wife, who became a widow, often at the age of seventy-three, is expected to live until she is eighty-two. Most women in this scenario never remarry. Therefore, most women are widowed for nine years before their deaths. What does the estate plan provide for her and can she manage it. Also, does she need to be insulated from one or more children for the benefit of the family generally, and specifically the other children and grandchildren.

Most families in our area have at least two children. In many cases, the most economically productive one receives the smaller share of his or her parent’s wealth, when gifts during the life of the parents are figured in to the calculation, while the least productive receives the lion’s share of both gifts and inheritance.

Also, in establishing an estate plan, Stanley's data indicates that more than four in ten of their daughters (more currently perhaps 5 in 10) who marry will be divorced at least once. The advice and counsel is the most important component of any estate plan, including a will and any trusts that may be needed.

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