What is the role of Executor if Trustee Successor is given all responsibility?
Dad asked me to be Executor of his and mom's will. They originally had a close friend who died, then asked my older sister who declined, then asked me. I accepted thinking I would be liquidating all assets, selling assets and basically closing shop. While reading paperwork, I realized the Will was pared down to only a few pages. It said all assets go to a trust and older sister is the Trustee Successor. Upon reading the trust statement, I see they gave sister responsibility for liquidating assets, paying outstanding debts, selling house and its contents, and taking a salary of whatever she deems reasonable for her trouble. After sister settles things she is to divide half of what remains with me.
My question is on two levels. First, the practical one - what does an Executor actually do in this situation? Second, the emotional one - is it unusual to not even be mentioned in your parent's Will?
(Along with being the 3rd choice for Executor and not being named in their Will, I'm having a hard time not feeling a bit overlooked.) Thanks.
9 Answers
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Second, check the will again to determine if the trust only comes into existence if one spouse is still living. A typical estate planning tool would be for a trust to receive some or all assets upon the death of the first spouse, with the assets to be held for the surviving spouse's benefit, and then pass to the eventual beneficiaries when the second spouse dies. In this way, the assets don't have to pass through probate after the second spouse dies, and can then be passed to the beneficiaries in somewhat of an easier manner.
As the executor, you are ultimately responsible for settling the debts and disposing of the assets as instructed in the will. You may also be required to file an estate or inheritance tax return, and pay any tax due. All of this must be done before any assets can be transferred into a trust, otherwise you may be held personally liable for failing to do so. By the way, you are also allowed to take an executor's commission for your trouble, if that is a concern.
If the plan is to eventually sell the assets and distribute the proceeds to you and your sister as soon as possible, the trust may be somewhat unnecessary since the beneficiary provisions seem to be the same in both. If both you and your sister agree, an attorney may be able to ask a court to allow for the trust to be ignored and for the assets to be disposed of and distributed directly from the estate.
If I understand correctly, you were verbally asked to act as Executrix, but your sister was named as Successor Trustee in the Trust, is that correct? If your agreement was verbal, and not incorporated into any Pour-Over Will and Trust, you are not the person who will handle the Trust and carry out the duties you described.
Unfortunately, the acceptance of someone verbally is not valid when someone has been named in the Trust to handle the asset management. Perhaps your father was unaware of this.
As to your second question, again, the Will literally refers to the Trust for terms. Are you not mentioned at all in the Trust, in the beginning sections when heirs and beneficiaries are identified?
Are either or both of your parents still alive? If so, this is an issue to discuss with them, and return to an attorney's office if it's their desire that you serve as Trustee.
Alternately, you and your sister can serve as Co-Trustees, if that's what your parents want.
A Living Trust is funded PRIOR to death. Assets with titles, such as real property, are transferred via Deed from those who hold title to the trust, i.e., "(Ginger's mother and father) (convey) to the Living Trust for Ginger's Mother and Father, u/d/o (under date of) (insert date). That's just the general wording, as it might be for transfer of real property.
Investments are retitled in the name of trust as well.
If the assets haven't been transferred into the Trust, they are not FUNDED into the Trust and will not be handled accordance to Trust provisions. Also, they will not be subject to the compressed and increased tax rates of Trust assets.
I also disagree that "it's not unusual not being mentioned in a will". How else would beneficiaries and heirs be identified?
As to the statement "It's really just a legal document." - it's much more. It's THE dispositive document, either in conjunction with a Living Trust, or other kind of Trust, identifying the individual(s) who are making the bequests, those who are legally empowered to act, and those who are entitled to receive the assets.
Wills are not only important for asset disposition, they're the means by which those assets are conveyed to the family and/or others of choice.
Ginger, if your parents are alive, I think determining their desires is the first step to clarification, then meet with the attorney who prepared their estate plan for a thorough and understandable explanation on the difference between a Last Will and Testament, a Pour-Over Will, and a Living Trust.
I understand the hurt you must feel at POSSIBLY being excluded, but it seems to me that there might have been confusion in the drafting of the documents, if your father asked you to serve but your sister is identified as having the same capacity in the Trust. Best to get this straightened out now, not only for legal purposes but for family cohesion so that no one is hurt or left out.
If any of what I've written is confusing, post back and I'll try to explain better.
CAVEAT: I only worked as a paralegal in law firms, not an attorney, and what I've written is to the best of my knowledge and experience.
As for the will being just a legal document and not being mentioned by name in the will, I simply meant to suggest to Ginger that it should not be considered a reflection of her parents' feelings towards her. It is just a legal document prepared by an attorney, and not a love letter. It's not worth having hurt feelings over.
The posts kinda read that it’s some type a Testamentary Trust, which is a real different legal creature than a Trust done when everybody’s alive.
So is the “trust” to be created as per the terms in the will (Testamentary Trust)??
Also as an aside attempting to get Testamentary Trust to be ignored by probate judge is a pretty tall order to judge to agree to imho. My experience as executor is that whatever is in the will, even if beyond loco, still has to be done .
GardenArtist, any ideas as to how / why a Testamentary Trust could be ignored??
I think probably there are some issues that could be clarified so we (including me!) don't make assumptions!
Igloo, no, I actually have no insights on ignoring terms of a Testamentary Trust. That's beyond my skill level, at least now. Sometimes I have brainstorms in the middle of the night, but I think this situation is not going to be subject to any such spontaneous comprehension.