Trust administration: November 2010 Archives

November 23, 2010

Appointing a Bank as Executor

  woman banker.jpgDear Liza: Is it possible to appoint a bank Executor of Estate ?  I am not comfortable appointing family members or friends for a number of reasons. You bet. Many banks have trust departments who can provide services to families, as executors or trustees. They, of course, charge for this service. So, if there is a bank or financial service firm that you already work with, ask them if they have a trust department. Ask them what their fees for this are -- many charge a percentage of the assets under management, which can range from .75% to 1.5%, depending on the size of the estate. Also ask them if they require special language to be in your Will or trust, some do, and some don't. If they do, get the language and ask your attorney to incorporate that into your documents, or, if you're doing them yourself, make sure you're doing what the bank requires. Two things to think about, though. The first is that the banking industry has been through some, ahem, turmoil, lately--so you need to consider how you'd feel if your friendly local bank gets sold to some megalopolis bank and some banker in a far away city takes over as your family's executor.  If that's not OK with you, you might want to name a second choice and say that if your local bank is sold, you don't want the bank's successor to be your executor, but want your second choice to serve instead. The second thing is, if there's a particular banker you really like, you can add language to your documents that says you want that banker to do the job, even if they move to another institution with trust powers.

November 10, 2010

Ripeness is all--take your time with trust administration

clockface.jpgDear Liza: My dear friend recently died. He left his house to his mother, who lives far away. How soon can I transfer the house to her? I am eager to get this done as soon as possible because until then the trust has to pay the mortgage.  So, you have to wait until the survivorship period is over before you can distribute any property to anyone. This will be in the trust--it is usually thirty (30) days, but can be longer. A person has to survive at least that long after there's been a death to inherit anything. This is to prevent property going to someone, and then having them die and leave the property to someone else entirely. You can transfer the house the day after that period ends. But settling an estate takes time. Please don't distribute anything until you're sure you know what the bills and debts there are to pay off and whether there will be income taxes due for the last year of your friend's life. Beneficiaries are often in a big hurry to inherit, but prudent trustees take their time and let beneficiaries know that debts and bills come first.