Who Do You Trust? Selecting an Executor or Trustee - A Primer
by James V. Quillinan, Attorney at Law
The Letitia Building
70 South First Street
San Jose, California 95113-2406

A corporate fiduciary must comply with state law in order to be authorized to act as a fiduciary. States may impose relatively few requirements on a bank or savings and loan (e.g., merely having a corporate charter authorizating the corporation to act as a fiduciary may be sufficient). In contrast, additional requirements may be imposed upon:

1. other types of corporations (e.g., the state will grant a trust company a charter only if the corporation satisfies certain requirements) and
2. nondomestic corporations (e.g., foreign corporations have authority to act locally as fiduciaries only if the foreign state permits local corporations to act in the foreign state).

You should select executors and trustees who possess the traits necessary to perform in a professional and competent fiduciary manner.

Honesty. The fiduciary must be someone in whom you have complete trust. If you have any doubt regarding the potential designee's honesty or integrity, you should select a different person.

Common Sense and Good Judgment. The fiduciary must make many discretionary decisions. Accordingly, it is important for the fiduciary to have a good measure of common sense; the fiduciary must act prudently and reasonably at all times.

Financial Responsibility. Individuals and corporations who have experienced success in their own financial matters are more likely to be able to do the same for assets managed in a fiduciary capacity. In addition, financially stable persons should not be as motivated to embezzle estate property as are persons with financial troubles. You should seek fiduciaries who are financially solid and not involved in litigation that could lead to the individual's or corporation's bankruptcy.

Investment Experience and Skill. The level of experience, skill and knowledge needed to serve as an executor or trustee depends on the type, amount and value of property that the fiduciary will manage. Vastly different expertise is needed to manage diverse investments, which may range from portfolios of stocks and bonds to high-rise apartments to farms to oil and gas properties.