Executor of Parent's Will

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Profaneday
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Executor of Parent's Will

Post by Profaneday »

I am currently named, along with my sister, as co-executors of our parents' wills. The wills also stipulate that if either executor rescinds the position my brother will assume the role as co-executor. Some additional details:

1) I am one of three children.
2) The total estate (including two irrecoverable trusts of which all three children are named co-trustees) is worth under $3m. About 1/2 of those assets are in the trust, and 1/2 are in the wills.
3) The documents (wills and trusts) were codified in NY state. My parents (both 90+ years old) are residing in Ct.
4) The wishes of my parents as communicated through the documents is the entirety of the estate be split equal among each of the three children
5) There is great animosity among the children with little to no communication among them.
6) I am the POA for each of my parents.

Questions: What, if any, are the options and processes for engaging a dispassionate third party to own a sole executor role in place of the three children? If it is an option what are some potential pros and cons of pursuing it?
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Lee_WSP
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Re: Executor of Parent's Will

Post by Lee_WSP »

Profaneday wrote: Tue Jun 21, 2022 2:37 pm
Questions: What, if any, are the options and processes for engaging a dispassionate third party to own a sole executor role in place of the three children? If it is an option what are some potential pros and cons of pursuing it?
You’ll need to either get your parents to change the terms and name a corporate administrator or you and your sister need to agree and then just delegate the task to an outside firm.

Pros - you don’t have to do much, they should be a professional and things should run as smoothly as possible, you don’t have to deal with your other siblings, you don’t have to make hard choices.

Cons - they’re costly. Also, don’t cheap out. The super cheap ones are most likely negligent or worse.
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JoeRetire
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Re: Executor of Parent's Will

Post by JoeRetire »

Profaneday wrote: Tue Jun 21, 2022 2:37 pm Questions: What, if any, are the options and processes for engaging a dispassionate third party to own a sole executor role in place of the three children? If it is an option what are some potential pros and cons of pursuing it?
Your parents can do this if they choose. You cannot.
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FreddieFIRE
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Re: Executor of Parent's Will

Post by FreddieFIRE »

Profaneday wrote: Tue Jun 21, 2022 2:37 pm 2) The total estate (including two irrecoverable trusts of which all three children are named co-trustees) is worth under $3m. About 1/2 of those assets are in the trust, and 1/2 are in the wills.
How liquid are the 1/2 of assets not owned by the trusts? If most/all allow beneficiary designations, than perhaps your parents could be convinced to name each of the children as 1/3 beneficiary. That could solve up to half of the "problem."

Irrevocable (I'm sure you didn't mean "irrecoverable") trusts are another matter. Having a trio of co-trustees that don't get along sounds like a big potential problem, especially if the trusts don't allow splitting into sub-trusts with each beneficiary being able to serve as trustee of co-trustee of their own trust. Do you know how they are structured?

I am not a lawyer, and I can prove it.
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bsteiner
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Re: Executor of Parent's Will

Post by bsteiner »

Profaneday wrote: Tue Jun 21, 2022 2:37 pm I am currently named, along with my sister, as co-executors of our parents' wills. The wills also stipulate that if either executor rescinds the position my brother will assume the role as co-executor. Some additional details:

1) I am one of three children.
2) The total estate (including two irrecoverable trusts of which all three children are named co-trustees) is worth under $3m. About 1/2 of those assets are in the trust, and 1/2 are in the wills.
3) The documents (wills and trusts) were codified in NY state. My parents (both 90+ years old) are residing in Ct.
4) The wishes of my parents as communicated through the documents is the entirety of the estate be split equal among each of the three children
5) There is great animosity among the children with little to no communication among them.
6) I am the POA for each of my parents.

Questions: What, if any, are the options and processes for engaging a dispassionate third party to own a sole executor role in place of the three children? If it is an option what are some potential pros and cons of pursuing it?
If the children don't get along, having a neutral executor may allow you to avoid chaos. It could be either an individual or a bank or trust company. While some banks and trust companies have higher minimum size requirements, some will take estates of this size.
Lee_WSP wrote: Tue Jun 21, 2022 3:06 pm ...
You’ll need to either get your parents to change the terms and name a corporate administrator or you and your sister need to agree and then just delegate the task to an outside firm.

Pros - you don’t have to do much, they should be a professional and things should run as smoothly as possible, you don’t have to deal with your other siblings, you don’t have to make hard choices.

Cons - they’re costly. Also, don’t cheap out. The super cheap ones are most likely negligent or worse.
Don't worry about the cost. It will be worth it to avoid the chaos and the possibly much higher legal fees of having two of the children serve when the children don't get along.
FreddieFIRE wrote: Tue Jun 21, 2022 3:31 pm
Profaneday wrote: Tue Jun 21, 2022 2:37 pm 2) The total estate (including two irrecoverable trusts of which all three children are named co-trustees) is worth under $3m. About 1/2 of those assets are in the trust, and 1/2 are in the wills.
How liquid are the 1/2 of assets not owned by the trusts? If most/all allow beneficiary designations, than perhaps your parents could be convinced to name each of the children as 1/3 beneficiary. That could solve up to half of the "problem."

Irrevocable (I'm sure you didn't mean "irrecoverable") trusts are another matter. Having a trio of co-trustees that don't get along sounds like a big potential problem, especially if the trusts don't allow splitting into sub-trusts with each beneficiary being able to serve as trustee of co-trustee of their own trust. Do you know how they are structured?

I am not a lawyer, and I can prove it.
If they're going to update their Wills to provide for a neutral executor, they could provide for their children in separate trusts rather than outright. If appropriate, each child could be a trustee of his/her own trust, together with someone the child is comfortable with as co-trustee.

They would have to look at the existing trusts to see how they can best accomplish that with the assets in them.
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FreddieFIRE
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Re: Executor of Parent's Will

Post by FreddieFIRE »

bsteiner wrote: Tue Jun 21, 2022 4:22 pm
FreddieFIRE wrote: Tue Jun 21, 2022 3:31 pm
Profaneday wrote: Tue Jun 21, 2022 2:37 pm 2) The total estate (including two irrecoverable trusts of which all three children are named co-trustees) is worth under $3m. About 1/2 of those assets are in the trust, and 1/2 are in the wills.
How liquid are the 1/2 of assets not owned by the trusts? If most/all allow beneficiary designations, than perhaps your parents could be convinced to name each of the children as 1/3 beneficiary. That could solve up to half of the "problem."

Irrevocable (I'm sure you didn't mean "irrecoverable") trusts are another matter. Having a trio of co-trustees that don't get along sounds like a big potential problem, especially if the trusts don't allow splitting into sub-trusts with each beneficiary being able to serve as trustee of co-trustee of their own trust. Do you know how they are structured?

I am not a lawyer, and I can prove it.
If they're going to update their Wills to provide for a neutral executor, they could provide for their children in separate trusts rather than outright. If appropriate, each child could be a trustee of his/her own trust, together with someone the child is comfortable with as co-trustee.

They would have to look at the existing trusts to see how they can best accomplish that with the assets in them.
That makes sense. I was looking more towards the path of least resistance in the event that the parents had no interest in updating their estate plans. If most of the non-trust assets passed via beneficiary designation, then there wouldn't be much left to fight about (outside of trusts with trio-trustees :shock: )
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bsteiner
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Re: Executor of Parent's Will

Post by bsteiner »

FreddieFIRE wrote: Tue Jun 21, 2022 4:53 pm
bsteiner wrote: Tue Jun 21, 2022 4:22 pm ...
If they're going to update their Wills to provide for a neutral executor, they could provide for their children in separate trusts rather than outright. If appropriate, each child could be a trustee of his/her own trust, together with someone the child is comfortable with as co-trustee.

They would have to look at the existing trusts to see how they can best accomplish that with the assets in them.
That makes sense. I was looking more towards the path of least resistance in the event that the parents had no interest in updating their estate plans. If most of the non-trust assets passed via beneficiary designation, then there wouldn't be much left to fight about (outside of trusts with trio-trustees :shock.
It's often the case that there's an issue that's equally or more important than the one that someone raises.

When someone is willing to make one change, that's often a good time to accomplish additional changes.
Keith5337
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Re: Executor of Parent's Will

Post by Keith5337 »

Just because you are co-executors doesn't mean that you don't needs legal advice to "execute" the terms of the wills.
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FreddieFIRE
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Re: Executor of Parent's Will

Post by FreddieFIRE »

Keith5337 wrote: Tue Jun 21, 2022 10:31 pm Just because you are co-executors doesn't mean that you don't needs legal advice to "execute" the terms of the wills.
Is it true that co-executors would each need to hire their own lawyer?
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Lee_WSP
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Re: Executor of Parent's Will

Post by Lee_WSP »

FreddieFIRE wrote: Tue Jun 21, 2022 10:42 pm
Keith5337 wrote: Tue Jun 21, 2022 10:31 pm Just because you are co-executors doesn't mean that you don't needs legal advice to "execute" the terms of the wills.
Is it true that co-executors would each need to hire their own lawyer?
Only if they have a conflict, but it’s unlikely to not have a conflict. But it’s possible to agree on everything and have no conflict.
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FreddieFIRE
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Re: Executor of Parent's Will

Post by FreddieFIRE »

bsteiner wrote: Tue Jun 21, 2022 10:16 pm
FreddieFIRE wrote: Tue Jun 21, 2022 4:53 pm
bsteiner wrote: Tue Jun 21, 2022 4:22 pm ...
If they're going to update their Wills to provide for a neutral executor, they could provide for their children in separate trusts rather than outright. If appropriate, each child could be a trustee of his/her own trust, together with someone the child is comfortable with as co-trustee.

They would have to look at the existing trusts to see how they can best accomplish that with the assets in them.
That makes sense. I was looking more towards the path of least resistance in the event that the parents had no interest in updating their estate plans. If most of the non-trust assets passed via beneficiary designation, then there wouldn't be much left to fight about (outside of trusts with trio-trustees :shock.
It's often the case that there's an issue that's equally or more important than the one that someone raises.

When someone is willing to make one change, that's often a good time to accomplish additional changes.
I don't disagree, but the OP shared only that the parents were both 90+ years old and gave no indication that they would be ready, willing and able to make any changes. In fact, it sounds more like the parents might need all three kids to "encourage" them to make changes, which also sounds extremely unlikely. The option I mentioned was perhaps the easiest way to achieve some simplification without upsetting the apple cart. That said, I have encountered some elderly folks who have some very strange opinions about wills vs. beneficiary designations.
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Keith5337
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Re: Executor of Parent's Will

Post by Keith5337 »

FreddieFIRE wrote: Tue Jun 21, 2022 10:42 pm
Keith5337 wrote: Tue Jun 21, 2022 10:31 pm Just because you are co-executors doesn't mean that you don't needs legal advice to "execute" the terms of the wills.
Is it true that co-executors would each need to hire their own lawyer?
I guess if the co-executor that is being shut down could hire their own lawyer. Likely any they hire will say the same as the other lawyer.

The will is the will. And the law is the law. I don't think a family lawyer is going to try to bend the meaning of the law like a criminal lawyer would.
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FreddieFIRE
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Re: Executor of Parent's Will

Post by FreddieFIRE »

Keith5337 wrote: Tue Jun 21, 2022 11:33 pm
FreddieFIRE wrote: Tue Jun 21, 2022 10:42 pm
Keith5337 wrote: Tue Jun 21, 2022 10:31 pm Just because you are co-executors doesn't mean that you don't needs legal advice to "execute" the terms of the wills.
Is it true that co-executors would each need to hire their own lawyer?
I guess if the co-executor that is being shut down could hire their own lawyer. Likely any they hire will say the same as the other lawyer.

The will is the will. And the law is the law. I don't think a family lawyer is going to try to bend the meaning of the law like a criminal lawyer would.
That's not at all what I was referring to. I'm fairly certain that some (most?) lawyers would not want to get involved in trying to council two co-executors at the same time, especially two that don't get along.
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bsteiner
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Re: Executor of Parent's Will

Post by bsteiner »

FreddieFIRE wrote: Tue Jun 21, 2022 10:42 pm
Keith5337 wrote: Tue Jun 21, 2022 10:31 pm Just because you are co-executors doesn't mean that you don't needs legal advice to "execute" the terms of the wills.
Is it true that co-executors would each need to hire their own lawyer?
I've had three such cases where I represented one executor and another lawyer represented the other one. That usually only happens when they don't get along, or don't get along well. In each case, I got along with the other lawyer and we easily worked out who would do what. It helped that their interests in the estate were identical. In two of them, I already knew the other lawyer. In the third one, the other lawyer and I subsequently referred matters to each other.
FreddieFIRE wrote: Tue Jun 21, 2022 11:24 pm
bsteiner wrote: Tue Jun 21, 2022 10:16 pm
FreddieFIRE wrote: Tue Jun 21, 2022 4:53 pm
bsteiner wrote: Tue Jun 21, 2022 4:22 pm ...
If they're going to update their Wills to provide for a neutral executor, they could provide for their children in separate trusts rather than outright. If appropriate, each child could be a trustee of his/her own trust, together with someone the child is comfortable with as co-trustee.

They would have to look at the existing trusts to see how they can best accomplish that with the assets in them.
That makes sense. I was looking more towards the path of least resistance in the event that the parents had no interest in updating their estate plans. If most of the non-trust assets passed via beneficiary designation, then there wouldn't be much left to fight about (outside of trusts with trio-trustees :shock.
It's often the case that there's an issue that's equally or more important than the one that someone raises.

When someone is willing to make one change, that's often a good time to accomplish additional changes.
I don't disagree, but the OP shared only that the parents were both 90+ years old and gave no indication that they would be ready, willing and able to make any changes. In fact, it sounds more like the parents might need all three kids to "encourage" them to make changes, which also sounds extremely unlikely. The option I mentioned was perhaps the easiest way to achieve some simplification without upsetting the apple cart. That said, I have encountered some elderly folks who have some very strange opinions about wills vs. beneficiary designations.
Agreed. We don't know what if any changes the parents would be willing to make. But it may be worth trying.

As to the selection of executors, perhaps one of the two who are currently named might be able to raise the subject of a neutral executor or co-executor.

A child could ask the parents to provide for him/her in trust to keep his/her inheritance out of his/her estate, or to protect it against his/her creditors and spouses, and Medicaid. We've often accomplished it in that way. If the parents don't want to pay for that, the child could offer to have his/her lawyer draft that provision, or draft a separate trust to which the parents could leave his/her share.

Beneficiary designations for taxable accounts seem to be driven mainly by stockbrokers and other investment people. They don't do it maliciously, but it often defeats the estate plan.
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Profaneday
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Re: Executor of Parent's Will

Post by Profaneday »

Thanks so much all. I really appreciate the thoughtful insights!
BuddyJet
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Re: Executor of Parent's Will

Post by BuddyJet »

While not the question asked, I’d suggest having a lawyer look at the estate plan pre death since everything is based on NY law and residence rather than CT, where they now live.

I saved substantially on taxes by moving some trusts from NY to NJ
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bsteiner
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Re: Executor of Parent's Will

Post by bsteiner »

BuddyJet wrote: Wed Jun 22, 2022 2:18 pm While not the question asked, I’d suggest having a lawyer look at the estate plan pre death since everything is based on NY law and residence rather than CT, where they now live.

I saved substantially on taxes by moving some trusts from NY to NJ
Good points. That may be another way to encourage them to update their planning.
BuddyJet
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Re: Executor of Parent's Will

Post by BuddyJet »

Thanks. Another reason for a new look is to update the directive to physicians and health care proxy to the new state.
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