Reconsidering Your Role In Others' Estate Planning (How to Say No)
Reconsidering Your Role in Others’ Estate Plans (How to Say No)
It is important to think carefully about your ability or willingness to serve as an executor or trustee for someone else. If a family member or friend has asked you to serve as the executor of his or her estate or as trustee of a trust he or she is creating, there are a number of factors you should consider before accepting either of these important roles. If you have already accepted the role of trustee or executor for a family member or loved one, but are no longer able or willing to do so, it is important to resign in the proper way.
What Is an Executor?
An executor of an estate is an individual (or institution) appointed to administer the estate of someone who has died, i.e., to gather and safeguard all of his or her money and property, to ensure that all of the deceased person’s debts are paid, and to distribute his or her money and property as specified in the deceased person’s will or according to California law.
What Is a Trustee?
A trustee is an individual (or institution) that holds and administers assets (money or property) for the benefit of third parties called beneficiaries.
What to Consider Before Accepting the Role of Executor or Trustee
- First, keep in mind that you will be in a position of trust and will be held to a high standard of care when carrying out your responsibilities, and if you breach that duty of care, you could be personally liable to the estate or trust or to the beneficiaries.
- Second, to successfully serve as an executor or trustee, you will need to be well-organized, absolutely honest, keep meticulous records, be patient, and be able to get along well with the beneficiaries. Although it helps to have financial or legal knowledge, you do not need to be an expert in those areas because you can use funds from the estate or trust to pay for professional help if you need it.
- Third, you should consider the complexity of the deceased person’s estate or trust (e.g., did the person have a lot of unique or hard to value property or are there potential estate tax issues?), and in the case of an executor, the complexity of the California probate, as you evaluate whether you are able and willing to fulfill the role of executor or trustee.
- Fourth, think about personal issues: Do you live too far away to carry out your duties without substantial inconvenience and expense? Do the family members tend to be contentious, leading to a high likelihood of conflict? What payment are you entitled to receive for serving as executor or trustee? If there is a co-executor or co-trustee, will you be able to work well with that person?
After considering these factors, if you decide you do not want to be the executor or trustee, the next steps depend upon the stage at which you decline that role.
Saying No to an Executorship
Before death occurs. If someone asks you to serve as their executor or you find out that you have been named as executor in someone’s will, you should simply communicate what an honor it is to be asked to fulfill that role but let them know that you are unable to accept. There is no formal legal procedure to follow for declining to act as an executor prior to the person’s death. However, if the will has already been prepared, the individual should go back to their attorney and change that part to name someone else, who has agreed to act as their executor.
After death, but before formal appointment. Typically, if the person who named you as executor has died, but the court has not yet formally appointed you as executor, you should notify the beneficiaries or heirs of the estate of your intention to renounce the role of executor, fill out and sign a renunciation form, and file the form in the probate court that will handle the estate.
Resignation after acceptance of executorship. If you have been formally appointed as the executor by the probate court, but wish to resign, you must file a petition with the probate court. Until a new executor is appointed, you will continue to have a duty to protect the estate. In addition, you must account for and deliver any money and property belonging to the estate to the new executor when that person is appointed.
Saying No to a Trusteeship
Before the trust is created. If a loved one asks you to serve as a trustee for a trust he or she intends to create, but has not yet set up, you should simply graciously refuse, preferably communicating that you feel honored to have been asked but that you are not able to accept the role. There is no legal procedure you must follow at this stage.
After the trust is created, but before acceptance. Generally, if you have been named as trustee in the trust instrument, but have not yet accepted the trusteeship by complying with the terms set forth in the trust document specifying a method of acceptance or by accepting delivery of trust property, taking action to perform the duties of trustee, or otherwise demonstrating your acceptance of the role, you are allowed to reject the trusteeship. Although the law often does not require you to provide a formal written rejection of the role, it is optimal to provide written notice of your decision to all relevant parties, including the person who created the trust (if still living) and the beneficiaries of the trust. If you do not accept the trusteeship within a reasonable time of learning you have been named, you will likely be considered to have rejected it in the eyes of the law.
Resignation after acceptance of the trusteeship. If you are acting as a trustee, the terms of the trust may indicate the steps that are necessary to resign. If not, you should consult an attorney to find out what the necessary steps are. For example, you may have to provide notice (typically 30 days) to the person who created the trust if that person is still living, to co-trustees, and to qualified beneficiaries, or you may need to get court approval. The court may require you to take certain steps to ensure that the trust property is protected, for example, you will likely have an ongoing duty to administer the trust properly until another trustee is named to take your place. In addition, you must account for and promptly deliver all trust property you possess to the new trustee once appointed.
Give Us a Call
We can help you determine whether to accept or decline a role in someone else’s estate plan by providing a thorough explanation of what is involved and the correct method for declining or resigning that role if you so choose. If you have already taken on the role of trustee or executor, you need to check with us to make sure that you follow all the proper steps to avoid possible liability for failing to fulfill your fiduciary duties. Please call us today to set up a meeting to discuss any roles you may play in others’ estate plans, whether it is as executor or trustee or other roles, such as an agent under a medical or financial power of attorney, so we can advise you about your obligations and options.