Choosing the Right Executor or Trustee for Your Estate in New Jersey and New York

Welcome to Straight Forward Estate Planning with Padrani Law. Hello and welcome back to Straight Forward Estate Planning with Padrani Law. Keith Padrani is the founder of Padrani Law LLC and an attorney licensed in New York, New Jersey, and Connecticut with both the law and business background. He helps families protect what they've built through clear, practical estate, probate, and Medicaid planning. I may have been macking today, we're talking about how to choose the right executor or trustee. Keith will explain what to look for, what to avoid and how the right choice can make the entire process smoother for everyone involved. Keith, welcome back, sir. Thanks. I've been appreciate that introduction is always awesome. We're going to get into that choosing the right executor or that trustee for your estate in New Jersey and New York, but naming an executor or trustee can feel like a simple checkbox. But it's one of the most important decisions in a plan. What does that choice, why does that choice matter so much? The choice matters because the person that you choose is essentially the project manager for your estate. So, when you're thinking about that type of person you want to think about, you really want to take the emotion out of it, which is very difficult considering everything else involved in a state planning, it is very emotional. It's dealing with what happens after you pass away, what happens when you're incapacitated. To the best of your ability, it requires taking the emotion out of it, being honest with yourself and being honest about your opinion and of the strengths and weaknesses, often of your loved ones, which can be very difficult. But again, you want to make sure that you're picking the right person to manage this project. What qualities make someone a good fit for this role, though? Like, you know, beyond just being responsible, beyond being organized, beyond being related to you. Yeah, I mean, those are the basics and you would prefer someone related to you, but I would say that that's, I wouldn't consider that a prerequisite necessarily. So, beyond the organization and beyond the responsibility, you want somebody who's going to be level headed, who's going to be able to deal with other people who are going to be at in a period of grief because of your passing. You need someone who's not reactive, combative or naturally seeks conflict. And the reason I say that is you're dealing with family dynamics, you're dealing with money, you're doing it during a time where everyone who's involved has just experienced a significant loss. So, you're not dealing with them at their best. And a lot of family conflicts that have been, you know, kind of below the surface, come rushing to the surface during these type of times. So you just need someone who's going to be able to deal with all of that and still stay the course and meet deadlines and get done, what needs to get done, and have difficult conversations with people when they're asking, you know, why hasn't my inheritance come through yet? What's taking so long? What are the delays? You know, it's easy to, you know, with the probate process, it does take a bit. So it's easy for people to left their own devices, kind of start thinking that they're getting scammed, start thinking the executor or the executor is not doing his or her job correctly, and 99% of the time, that's just not the case. But the way that the executor or the executor communicates that to the other people involved to the other beneficiaries involved can be just as important as the truth. Families often default to naming the oldest child or sibling, what kind of challenges can that create, especially if a family relationships are complicated in your experience? Sure. So I mean, I'm an oldest, and, you know, I understand everyone, you know, kind of the things that's the oldest by default, I always think of succession when a candle at the end is just screaming. I am the eldest boy, you know, like it gives them the right to everything, and, you know, it's not always the case that the oldest is the best for the job. It really birth-order has really no bearing on it. I mean, it's something that could certainly create resentment if you have an oldest that's clearly not qualified, or should not have been chosen, or there was a better choice, you know, a middle child, a youngest child, anybody else would have obviously been a better choice. That's going to create tension from the start, because that, and it's not really fair to your oldest, either, if they're clearly not the best equipped with it, they're now going into it with everyone thinking they were only selected because they were the oldest, not because they're qualified, not because they can handle it. And then kind of regardless of what the actual truth is, family members start looking for confirmation of that initial feeling, that they're not qualified, so now everything they do is under a microscope, presumably it's going to be the first time that they're dealing with in a state, so hopefully they have the support, you know, of a professional like myself. But if they don't, then even doing the right thing, like I said before, can look like they're not handling it correctly just because of the pace of probate, and then if they do make a mistake, you know, God forbid, then the other siblings have concern or the other beneficiaries have concern, and that person may not be equipped to handle that either, to handle those pressures and dynamics. How do you keep clients like, you know, balance trust and skill, you know, how do you help them with that, choosing someone they love versus someone who can actually handle the job? Where do you come in with that? Because it seems like a delicate situation. It can be at times. Most clients come in with a very clear picture of who they want, there's a very little discussion of it, and they're on the same page. Other times, you know, if I sense that there's hesitancy, if I sense that maybe one partner is not 100% on board with what the other things, or if, you know, there's concerns in one area where, you know, just in our previous conversation, you were talking about how you were concerned about John receiving an inheritance outright, but now we're talking about putting him in the role of the executor, that would prompt me to, you know, ask a question of, okay, so why are we worried about him receiving an outright inheritance? And then, you know, through those answers, you can kind of get to what their concerns are and then that opens door to say, okay, well, maybe he's not the best person to be the executor. So it's usually listening, listening for hesitancy, listening for any signs that they may not be 100% sure about their selection, and some will, it's rare, but some will come right out and just say that I don't know what to do here because I don't have anybody in my life that can handle this, or I have someone in my life that can handle this, but they live out of state, or they're so busy with everything else. I don't know that I want to put this on them, so they might be capable, but not available, which can often be the case, the more capable people in your life tend to be, the busier ones, and it might not be within their realm of possibility, time management wise to manage in a state as well. So it's really about listening, providing guidance, and in situations where, you know, there's conflict already within the family. That's what I might suggest, either a professional trustee or executor, a neutral party, someone outside of the family, and who does this, basically for a living, or at the very least to serve alongside the family member, you can have co-executors, co-trustees, it's not something that I would recommend to put your loved ones in that situation, you know, let's say for instance you have two children, I wouldn't make them co-executors, you know, you just make the choice for one, and it should be more efficient, but if you're worried and there is already conflict in the family, I would say one family member, one professional, can be an effective tool for dealing with that. Do you have an example in your experience, you know, where, you know, the right or wrong or executor made a difference in how smoothly things were handled or how bad things went? Sure, fortunately, I'm not a wood, but in my experience, I only have good examples so far, so it was, you know, that was mainly really the clients making the choice. You know, I provided guidance when asked for, and certainly have a breed with the choices, but they came in with them for the most part, and it was the person who was the most level headed, who was, of course, going to be grieving like everybody else, but could, you know, compartmentalize that to the extent possible where they weren't going to fall apart every time. They had to do something on the estate because it reminded them, you know, there's an emotional strength with that paired with the organization skills, so fortunately, where I provided guidance and probate everyone has been really, we've been very fortunate, there's been very little conflict if any, but I've certainly, you know, seen it on the other side, I've heard from my colleagues who practice more in a state litigation, of course, that's all they see is, you know, where, you know, can go wrong or how it can go wrong, and we've had, you know, a situation where family members were disinherited in favor of non-family members, and there was, you know, a threatened conflict in that case, but, you know, never came to fruition, but it can certainly happen, and when the states go into litigation, the only people who win there are the lawyers, they're going to drain the resources of the estate, everyone's going to end up with less, generally speaking, and you can put no contest clauses in the documents and things like that as a deterrent, but there's nothing that can fully prevent people from fighting over your state, unfortunately, so the best thing that you can do is, and I encourage all clients to do this, once you have your documents set, you've made your decisions, or, you know, before, if you want to include your family members in those decisions, have the conversation with the person that you want to be your executor, that you want to serve as trustee, that you want to handle everything, make sure that they're on board to do that ahead of time, and if there are other family members that you think that might cause an issue with, I would address that head-on then, so there's no misinterpretation later on, or any way that your other kids can point to the one that was named as executor and say, oh, you, you, you, you know, you tricked mom and dad into doing that, or you coerced them somehow or something like that, I mean, again, you can't prevent people from fighting, but it's a lot more difficult for them to make that kind of a claim later on if you took the time to sit with them and say, you know, you have a lot of strengths and weaknesses, you know, so does your brother, for instance, for this particular task, we're going to have your brother do the, you know, be the executor for the estate and manage it, it's nothing personal against you, but this is how we want it handled once we're gone. I think, you know, that type of conversation while you're still alive can go a long way towards clarifying things and leaving very little ambiguity once you have passed away. How do you handle situations where maybe a professional trustee or co-executor might make more sense than a family member? So in that case, we, we make the recommendation, and again, you know, the importance is to get comfortable with the person or the organization more often the organization really that you're going to put in that role in the document. So in the same way that you should interview multiple professionals to do your estate planning or your Medicaid planning, the key is to get come make the match of who the client is going to be most comfortable with leaving in that role and who they think will deal best with their own family, because they're really the best person to make that call. So, you know, I can provide the guidance of, you know, based on what you're telling me, it doesn't seem like any of your children or immediate family should handle it. Let's look outside and then from there, it's the client to really provide, okay, I think professional A is going to work better with my family than professional B, you know, professional A is really by the book and doesn't feel like they would consider anything that my family has to say, you know, professional B is going to be able to be level headed and speak plainly to my family. I think that will be better, you know, will be a better fit. So, it's just about finding that correct fit for your situation and you can only do it, you know, to the best of the information that you have available at that time. What kind of conversations family should have before naming someone like this executor is so someone can understand what's expected and what they're agreeing to take on, perhaps? Sure, so the conversation really needs to be, do you think that you'll be able to take this on? And you have to put, you know, yourself in the position of, you know, I've just passed away often if, you know, if you're if it's your child that you're speaking with, that means you're significant, other as predecessors to you as well. So, you know, you're going to be in a position where you're dealing with everything, where your siblings are going to be asking you questions, if there's other beneficiaries that are provided for in your state planning documents, they're going to be asking you questions as well. They're going to be looking to you for guidance and for answers and it's really not an option for you to shut them out or it's going to create issues. You're going to be the one dealing with the surrogate score or dealing with the attorneys and the other professionals that are involved with our state planning and it's going to be a significant undertaking and you may elect to compensate them for that. So, they may receive additional benefit from your state as a result of taking on all of that or, you know, they may not. Some people opt to have the provision that any executor is entitled to compensation, others say an executor other than a beneficiary under the state planning. So, that's a distinction you have to make as well is that executor going to be okay. If they are within your family, let's just say you have three children, are they going to be okay getting the same third that your other children are getting even though they're taking on this increased role. And most of the time the answer is yes. Most of the time there's not really, you know, the child's not seeking anything additional. Usually it's an honor, you know, to be asked. But, you know, you want to make sure that that's how it's going to be received. You want to make sure that it's not going to be an imposition. And you may find out something that you don't know at the moment. You know, maybe your child is going to say to you, well, listen, if you're staying in New Jersey, that might be a problem because my significant other is looking at jobs in California. And we may not be here when you pass away. We may be across the country, which would of course prompt you to rethink the entire plan, at least from the perspective of who's going to be the executor or who's going to be the trustee. So it's certainly, it's not a requirement, but it's certainly beneficial long term to have that conversation with the people that you're envisioning in these roles while you're still alive. And I would say especially if you're thinking about naming co-executors or co-trustees, that you really want to have the conversation with those individuals separate from each other. And together to make sure that that's going to be, you know, a winning solution, so to speak. Finally, for listeners who already have that estate plan, what signs suggest it might be time to revisit into like who they've chosen as an executor or a trustee? Sure. So if you've had a falling out since the documents have been signed, you know, the relationships just not the same. And you don't no longer really envision them in that role. You need to update your documents to reflect that. Touching on something I brought up before if they've moved out of the area. So if you're in New York and New Jersey and they're out of state now, it depends on their ability to serve, or I'm sorry, it could really hinder their ability to serve if they're out of state. It's not impossible, but it is difficult and you may have someone that's in state that might be just as well qualified that you can change to. There might be issues that that person has developed that they didn't have at the time that you name them to be in those important roles. Maybe they've come on hard times financially. Maybe they've developed a gambling issue or a substance abuse issue, something like that. If they're dealing with that, I'm not saying that they won't be able to overcome it or may not come out of it by the time you pass away, but really not a chance you want to take with your state plan. If they're going through struggles like that, you may want to reconsider who's serving as your executive or who's serving as your trustee and update your plans accordingly. All right. Keith, my brother, thank you so much. Thanks for having to take care. All right, guys, that's it for today's episode of straightforward estate planning with padrani law. To learn more about Keith's work or to schedule that consultation, visit padranilaw.com. You'll find clear guidance on estate planning, pro-bake in Medicaid planning for families across New Jersey and New York. Thanks for listening. Don't forget to like, subscribe, and leave a review if you found this episode helpful. Thank you so much and we'll see you next time. Thanks for watching. Be sure to hit that like and subscribe button and leave us a review in the comments.