Tuesday January 15, 2019

Lessons from the (Un)Grateful Dead: How to Appoint your Estate Executor

Authored by: George M. Clarke Posted in: Real Estate

Choosing who will act as your executor is a decision that should not be taken lightly. An executor must collect and distribute estate assets, pay bills (including taxes), keep accurate records and potentially deal with difficult or even hostile family members. Many people assume they must choose their oldest child, or all their children in order to ‘keep the peace.’ In second or subsequent marriages, people often think they must appoint their current spouse. So, who should you choose as your executor? A better question might be “who should you not choose?”

Jerome John Garcia (aka “Jerry Garcia”) was the founder and undisputed leader of the legendary band the ‘Grateful Dead’ which had been performing for over 30 years at the time of his death in 1995. Court documents filed at the time valued his estate at $9.9 million (not including future royalties for his music and Ben & Jerry’s ‘Cherry Garcia’ ice cream). Jerry divided his estate among his third wife, four daughters (three by two ex-wives and one by a former girlfriend), a stepdaughter and some other family members. The will included support for his second wife, Carolyn “Mountain Girl” Adams and child support for his daughter, Keelin.

As is often the case in celebrity estates there was trouble brewing. This trouble was exacerbated by Jerry’s decision to appoint his third wife, Deborah Koons whom he married barely a year before his death, to administer the estate. As executor, one of Deborah’s first decisions was to bar Jerry’s two ex-wives from his funeral. Another decision Deborah made was to stop support payments Jerry had been making to Mountain Girl which was part of a 20-year, $5 million settlement they had made. Although the terms of the will itself were never challenged, years of bickering and court battles ensued, no doubt enriching a multitude of lawyers at the expense of Jerry’s estate and beneficiaries.

Appointing a spouse as executor is common and works well in many cases. However, because of Jerry’s various marriages and children, his estate would have been better served had he selected outside the family. When appointing an executor, choose someone who is willing to take on the job. Discuss it with any potential candidate. Naming a back- up is always a good idea. Your executor must be trustworthy, honest and organized. They should have some experience managing money and be comfortable dealing with lawyers and accountants. Choosing someone who can deal objectively with your relatives and beneficiaries is very important. The executor must follow the terms of the will and act in the best interests of the estate, not their own.

In many cases, a spouse, child or other family members may be suitable, although many people will appoint their lawyer, accountant, other advisor or a trust company depending on the circumstances. A trust company, or corporate executor, is worth considering if there are limited options within the family or if the estate is large and includes business holdings. A corporate executor has the benefit of being neutral where there are beneficiaries from multiple relationships and blended families.

Choosing an executor is an important decision. Appointing the wrong person can cost your estate a lot of money and potentially harm your family. Removing a bad executor once they have been appointed is very difficult and expensive.

If you are interested in learning more about estate planning, including the appointment of your executor, please contact us. We have a large and skilled team of estate lawyers who will be pleased to assist you with all your planning needs.

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