Topic: Trustee or Executor Action

WHAT IF YOUR TRUSTEE OR EXECUTOR CANNOT OR WILL NOT ACT?

By Milton Babirak, JD, LLM      |      Babirak Carr, PC     |     Sterling, VA

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You can appoint an executor in your will to administer and probate your estate upon your death. You can appoint a trustee in your revocable trust to administer your trust upon your disability or death. What happens if your executor or trustee cannot or will not act? They could predecease you, become disabled, move far away, or decide they just did not want to do it for some reason. Usually, this is not a problem since you name a successor or substitute executor or trustee. But sometimes, and actually more frequently than you imagine, that doesn’t work. Here in northern Virginia many people come from other parts of the country and it is hard for them to find even a single family member or friend to appoint and it’s even harder to identify anyone to act as a substitute or successor. Sometimes, substitutes or successors cannot serve due to death or infirmity. What do you do then?

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Standard Methods

During your lifetime, you can periodically review your estate plan. If it looks like someone you have named is not suitable, you can prepare a codicil to your will or an amendment to your trust modifying or adding executors or trustees. If there are no individuals you can name, you can appoint a trust company or bank.

But what happens if you are disabled? If you are under a disability, you may not have the capacity to consult with a lawyer and execute an amendment to your trust. Check your durable power of attorney for financial affairs. It may contain a provision authorized by section 64.2-1622 of the Virginia Code permitting your agent to add a new trustee.

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Non-standard Methods

If that doesn’t work, there are two other possibilities. These are too complicated to be fully covered in this brief article. One way is to go to court and have the court appoint a person as a new trustee for your revocable trust. Obviously, this is an expensive alternative and it also takes time. Another approach is a non-judicial settlement agreement. The requirements for this are detailed and strict. However, if all of the interested parties consent, they may agree to certain specific changes including the appointment of a new trustee.