Sunday, April 01, 2012

So You're The Executor or Trustee Of Your Parents' Estate?

I'm sorry to hear that your parents have passed away. Odds are that the principal (or only) heirs of the estate are you and your siblings, and that you're now in one of two situations: By virtue of being an only child or having mature siblings, you have a general agreement about how to carry out your parents' wishes. Or you're dealing with one or more of your siblings who are not being reasonable, perhaps due to their emotional state, perhaps due to mental illness, perhaps due to sheer greed, perhaps for some other reason.

If you're in the first situation, consider yourself lucky. You and your siblings may even be able to distribute the estate without retaining a probate lawyer, particularly if the estate falls under your state's rules for small or simple estates. If your parents took their more significant assets out of the estate through the use of a living trust, designating beneficiaries on their financial accounts, or other similar measures, it's quite possible that not much will be left in the probate estate and that even if you retain a lawyer for the probate matters the legal fees will be quite reasonable.

On the other hand, you may be dealing with a situation in which one or more of your siblings is being unreasonable. What should you do? Odds are you were picked to be the executor or trustee because you're "the reasonable one", the sibling your parents viewed as being the person most capable of navigating the needs, demands and emotions of your siblings. You may be tempted to believe that if you simply try to reason with your sibling, or if you give them a bit of time, they will calm down and become reasonable. But even if there's a chance that your sibling (or siblings) will come around, I'm going to suggest that you be proactive.

Find and consult a good probate lawyer, and get a sense of your duties as administrator or trustee. You may decide after the consultation that it would be wise to retain the lawyer. You may decide to wait a while, but even if you do wait you are much better positioned to bring the lawyer into the case if things get out of control. Ideally, even if it means paying the attorney for an extensive consultation, you'll have a sense of how to proceed with your duties - how to dot the i's and cross the t's, keeping everything legal, above-board and properly documented.

What you cannot afford to do is to compromise your own position in order to appease a sibling. Your brother needs money now, now, now, not in a few months after notice has been sent to creditors and the estate is ready for distribution? The answer is "No, not until we have observed the required notice periods, have inventoried the estate, and agree on how the assets are going to be distributed". If you are not comfortable asserting that position to your sibling, bring in the lawyer and have the lawyer explain things. Take the heat off of yourself, send the message that you're not going to bend the rules, and also let your siblings know that if they are going to be unreasonable they are also going to run up legal fees. (Sad though it may be, with some people it's only that last part that inspires them to stop making unreasonable demands.)

There's something else that you can do, well in advance, that can help with trust and estate administration. If your parents, still of sound mind, have expressed wishes that are not consistent with their formal estate plan, help them get to an estate planning lawyer so that they can update their estate plan. If they have heirlooms or items with sentimental value, see if they want to specify beneficiaries for those items or designate a method for how they might be distributed with a minimum of conflict.

If your parents have valuables stashed away, make sure they leave instructions about what they are and where they are. On the one hand there are stories about the parent who had hundreds of thousands of dollars in a mattress that a child discarded as trash, on the other hand there are the siblings who are obsessed with the belief that their parents had hundreds of thousands of dollars in a mattress and accuse the administrator of theft when the mattress turns out to contain only stuffing.

If you follow the law, and follow the letter of the estate plan, you may make some of your siblings angry. But if you bend or break the rules to appease them you cannot count on their becoming happy - my experience suggests the contrary, that no matter what you do to appease an unreasonable sibling he'll simply want more. Some will even point to what you did at their request as evidence that you violated your fiduciary duties and should be removed from your role as administrator or trustee. So I urge you to follow the rules, get legal representation for the trust or estate as needed, and take a firm, sympathetic line with your siblings, "I am sorry that I cannot help you with that, but I have to do what the law requires."


  1. Boy, does that post sound like it has a story behind it . . .


  2. More than one, actually. It's a story that repeats itself, in one form or another, multiple times every day.

  3. How fortunate we are that the parents favorite is never a little spoiled brat who "gets back" at the less favored children in execution of the will.

    Because, you know, that scenario puts the Sainted Old in a bad light. And as Jesus taught us, only young people can be unreasonable. And by that I mean bad. But "bad" isn't something we can worm out of with "their money" so it's best to stick to "unreasonable".

    (Because Old People can do whatever they want, since it's "their money". Note here that morality can shut up, we is practical hard hitter now. We is only moral when bad people is being unreasonable. We is practical or moral as the situation benefits us.)

  4. A bit bitter, are we? Nobody said all administrators are perfect.

    If the administrator does not follow the terms of the will or trust, the other heirs and beneficiaries have bona fide legal remedies that they can exercise.

  5. thank you!

  6. I read in my Dad's will that I am "Trustee" for my brother's inheritance, (cuz he is a drug addict and cannot manage money.) AND, it says he sue me if i am not managing his funds to his drug addict self satisfacion.