Selecting the Right Executor, Guardian, and Trustee – What You Need to Know

In creating your will or estate plan, you’ll have to make several decisions, many of which focus on who gets what and how much. You may choose to make individual bequests (a gift under a will), directing a particular piece of property to a particular person, or you may make broad and sweeping bequests of all your property to a person or to be divided a certain way among a named group. You may choose that a person may get a certain bequest, but only at the age you decide (such as twenty-five or thirty years old). Regardless of the bequests to intended persons; there are more decisions other than who-gets-what-and-when. You should also decide who will actually carry out the instructions in your will. You should decide who will protect any assets you wish held until later. Very importantly, you should decide who will provide and care for any minor children you could leave behind. And you should decide who will serve as the backup for each of these roles. These decisions are as necessary to an effective estate plan as the bequests. Omitting one can have serious consequences, but appointing the wrong or unqualified person can be disastrous. This article briefly describes responsibilities of the executor, trustee, and guardian, and explains the qualifications to look for in each when creating your own plan.

1. The Executor
   
   In a will, the executor is the person who executes the provisions of the will. He will actually carry out the directions of the deceased, secure and protect the estate’s assets, pay claims such as taxes, and represent the estate in case of claims or disputes. By law, the executor is a necessary person for handling an estate’s business until the estate is closed. Consequently, if you don’t effectively name an executor, including a backup (successor) executor, then the Court will appoint one for you to carry out the plan. That can cost money from the estate, delay closing of the estate, and impact how the distributions will be carried out. An executor has legal duties (called fiduciary duties) to the estate, the estate’s creditors, and the estate’s beneficiaries. An executor is usually entitled to collect a fee from the estate provided she handles the estate assets according to the law.
   
   Choosing an executor requires some thought, but typically a close family member is chosen. In making the appointment, the testator (the will’s author) should consider the age and maturity of the nominee, the nominee’s residence and geographic proximity, the experience and trustworthiness of the nominee with the assets in the estate, the likelihood that the nominee may predecease the testator, and the nominee’s other obligations. Once the testator is satisfied that the nominee could effectively execute the provisions of the will, is willing to do it, and would likely live long enough to do it, he should then do the same planning and name a successor, or back-up, executor, just in case the first nominee is unable or unwilling to serve as executor.
   
   
2. The Guardian
   
   Second, a testator should seriously consider what would happen to any minor children he or she leaves behind. While children are not possessions, parents typically consider their children their most valuable and precious charges. If the other parent predeceases the testator, if both parents die in a common accident, or if the surviving parent is unable or unfit to care for the minor child, then the Court needs to know who to look for to fill that enormous role in caring for and supervising the child. If there is a surviving minor child but a guardian is not named, the Court has the unfortunate obligation to make its own decision, and try to be informed by the testimony of a few surviving friends and relatives. Sometimes, and despite being well-intentioned, the Court’s decision runs afoul of what the testator would have wanted, and the minor child(ren) are placed in a home and circumstances contrary to what their parent would have chosen, had he or she just written it down in their estate plan.
   
   Consequently, naming the guardian for any minor children can be more important than naming who will get the property. The guardian should be someone the testator knows very well, has seen interacting with their own and others’ children, and someone whose parenting style and beliefs parallel the testators. Because the guardian will be getting the most important and precious charge, and because the guardian can alter the course of the child’s life, sober reflection and consideration is warranted. Very often, testators choose persons other than the immediate family members that a Court might have chosen, because the decision is very private and made considering the way the child should be raised, not the family in which he will be raised. And as with the executor and trustee, there should be a back-up or successor guardian. If a couple is named as the guardian(s) of a minor child, the testator will have to designate a successor guardian, in case of the death of one or both guardians, or in the event of a divorce.
   
   
3. The Trustee
   
   Occasionally, a testator may want some assets held for a period of time until a certain event happens or until the intended beneficiary reaches a certain age. There are a variety of reasons to hold assets ‘in trust,’ but it is usually done to ensure that the beneficiary, if a minor or young adult, reaches at least a chronological age of maturity where he is less likely to squander the bequest. Because those assets need to be protected until the beneficiary reaches that age, they are held ‘in trust’ by a person called the trustee. The trustee is in charge of the affairs of the trust, and the property held in trust belongs to the trust (not to the estate). The trustee has power to make decisions about investments, distributions, use of professional advisors, and when to finally close the trust. And, like the executor, the trustee has fiduciary duties and responsibilities to the beneficiaries.
   
   Consequently, choosing a qualified trustee for any trust created is very important. Occasionally, testators name institutions to manage a trust created under their will, but this can be expensive and impersonal unless the trust is large. Frequently, testators name as the trustee family members or close friends who are familiar with both the testator and the trust beneficiary. The trustee, as the name implies, should be trustworthy with the assets held in trust. They must be able to keep those trust assets separate from their own assets, and protect/preserve them for the intended beneficiaries. The testator must recognize that temptation, and appoint a prudent, responsible and ethical person as trustee. As with the executor, the trustee should be someone expected to survive the testator long enough to carry out the provisions of the trust. Finally, when the testator has reached the decision on who to appoint, he should go through the selection process again for the successor trustee, just in case the first trustee is unwilling or unable to serve.

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Star Exemption Laws have changed in New York State

New York’s STAR (School Tax Relief) program provides partial exemptions from school property taxes. Under the STAR program, an eligible homeowner must file an application with the tax assessor’s office between October 1st and March 1st in order to be granted the exemption for the following tax year. The exemption then normally rolled over each year, and did not require any action to by the homeowner to renew. However, that automatic rollover ended in 2013.

Because of fraudulent or inappropriate STAR exemptions, and as part of an initiative to protect New Yorkers from wasteful spending, all homeowners who received a Basic STAR exemption in 2013 were required to re-register with the New York State Tax Department by December 31, 2013, in order to receive the exemption in 2014 and subsequent years. If you owned your own home and received a basic STAR exemption, but failed to register by the December 31 deadline, it is NOT too late. While the December 31 deadline has passed, the State of New York is accepting late registrations for current homeowners. Additionally, new property owners should also register for exemptions as soon as possible after purchasing a new home. It will be necessary to register each successive year to keep your STAR exemption.

The Basic STAR exemption applies to school district taxes, and saves homeowners statewide an average of $700.00 each year. To be eligible, the property must be owner-occupied, and the primary residence where the combined income of the resident owner and spouse is $500,000.00 or less. Besides the basic STAR, there are other exemptions available, such as Enhanced STAR, Senior STAR, Veteran’s STAR, Exemptions for persons with disabilities, and exemptions for agricultural properties.

Simply go to the website https://www.tax.ny.gov/star/ and register now. To be eligible all you need to do is provide your STAR code (it will be on the letter sent to you by the NY State Department of Taxation (or look up your code on the STAR registry at https://www8.tax.ny.gov/STRL/strlStart) and provide the requested information. If you think you’ve already registered, but want to make sure, you can call 518-457-2036 and register. All existing homeowners should have registered by December 31, 2013 but, because the deadline has been extended, homeowners and new purchasers should not wait any longer to claim their exemption.

For assistance in determining if you meet the necessary guidelines for all the available exemptions on your property, go to the local tax assessor, call our office at 315-472-4481, or send us an email at [email protected].

Established in 1973, Pappas, Cox, Kimpel, Dodd & Levine, P.C. is a law firm dedicated to providing friendly, accessible representation to individuals, families and small businesses in Central New York. The skills and experience of our attorneys and staff span a broad spectrum of practice areas so that we are well equipped to identify the unique, current and future needs of each client and develop a plan to meet those needs. Our goal is to be caring, practical and forward thinking in assisting our clients, no matter what their legal issue may be.