Duties and Powers of Fiduciaries

In your simple will you have appointed a personal representative, a custodian, and possibly a guardian. Each of these fiduciaries has certain duties and powers that come with their position. Some of their duties and powers are necessary so they can carry out their role and cannot be changed. On the other hand, you have some limited control over what some of their duties and powers are. In this part of your simple will, you will write your decisions about the duties and powers for each fiduciary.

Required Reading

Personal Representative

In a simple will, there are several decisions to make about the duties and powers of your personal representative.

Bond

The first question is whether your personal representative should have to obtain a bond to insure proper performance of his or her duties. Assuming you have selected a personal representative and alternates who are trustworthy, responsible, and capable of carrying out their duties, you may not feel a bond is necessary. In fact, it is very common for testators to state that no bond is required for this very reason.

If you have any reason to believe that the person you have named to be your personal representative (or an alternate) may not be trustworthy, responsible, or capable of carrying out their duties, and you want to protect the inheritance of the beneficiaries you name from the possible mistakes or bad behavior of your personal representative, it is a good idea to require a bond.

Note that if you have chosen a person who is not a resident of Washington State to be your personal representative, the court will require your personal representative to obtain a bond unless your simple will specifically states that no bond is required.

Nonintervention Powers

The next question is whether your personal representative should have nonintervention powers. Again, if you have selected a personal representative who is trustworthy, responsible, and capable of carrying out their duties, it is likely appropriate to grant him or her nonintervention powers. Because they prevent your personal representative from having to participate in as many court proceedings, nonintervention powers can save your estate a lot of fees. On the other hand, if you think a judge or court commissioner should be reviewing the important decisions your personal representative makes, you should not grant nonintervention powers.

Note that if your estate is insolvent, the court will not grant nonintervention powers to your personal representative, even if you try to grant them in your simple will.

Tax Elections

Your personal representative may have the opportunity to make many different choices about state and federal taxes. These choices, called tax elections, may enable your personal representative to reduce or eliminate certain taxes that your estate or beneficiaries would otherwise have to pay. For example, your personal representative may be able to take advantage of tax elections with respect to income you earned in the final year of your life, as well as income generated by your assets after you have passed away, thereby reducing your estate’s income tax obligations.

Your personal representative may be unable to make these tax elections if you do not grant that authority in your simple will. Because the types of tax elections that can be made change from time to time as the tax laws change, it is better to grant a general power to make tax elections rather than attempt to list individually each of the tax elections you want your personal representative to be able to make. Accordingly, our simple will template contains model language to grant a general power to your personal representative to make tax elections.

A review of the taxes your estate might have to pay is currently beyond the scope of these instructions. You can reasonably expect that, unless he or she is an accountant, your personal representative will hire an accountant to advise him or her about the available tax elections and to calculate and pay the taxes your estate will owe.

Note that you cannot rely on this grant of authority to eliminate your estate’s liability for state or federal estate tax, which is a specific kind of tax imposed on very large estates (those worth millions of dollars). A simple will is not appropriate for testators whose estates are likely to owe estate taxes.

Compensation

Your personal representative has a right to be compensated for his or her time. Under RCW 11.48.210 , your personal representative has two choices. He or she can either accept compensation in an amount stated in the will, or, if no compensation is stated in the will or the personal representative renounces the compensation stated in the will, he or she can accept whatever compensation the court decides is “just and reasonable.”

Stating a fixed amount in the will for your personal representative’s compensation is problematic, and we do not recommend it. It is extremely difficult to predict how much time and effort your personal representative will have to expend to carry out his or her duties. By stating a fixed dollar amount, you may be vastly overpaying or underpaying this person for their services. Instead, we recommend that you state that your personal representative is entitled to request reasonable compensation. This will do four things: First, it will encourage the personal representative to keep close track of his or her time spent working on your estate so that a reasonable amount can be calculated. Second, it will enable the court to increase or decrease the amount of compensation if, in its judgement, an adjustment would be necessary to make the compensation “just and reasonable.” Third, your beneficiaries will have an opportunity to review (and object to) your personal representative’s request for compensation, which will encourage your personal representative to keep his or her request down to a reasonable amount. Fourth, if your personal representative decides to donate his or her time, he or she can simply choose not make any request for compensation.

Our simple will template includes model language authorizing your personal representative to request reasonable compensation for his or her services.

Custodian

Unlike the case of your personal representative, there are no choices to be made in your simple will with respect to the duties and powers of custodians. Under the Uniform Transfers to Minors Act (UTMA), the critical decisions have already been made for you. For example, under the UTMA, your custodian has the right, during each calendar year, to charge reasonable compensation for services performed during the previous year.

Although our simple will template contains some model language indicating that your custodian has the right to reimbursement for expenses and reasonable compensation, your custodian would have these rights even if they were not stated in your simple will. Nonetheless, we recommend leaving this model language in place.

Guardian

In a simple will, there are a few decisions to make about the duties and powers of a guardian of your minor child(ren).

Bond

The first decision is whether the guardian should be required to obtain a bond to insure proper performance of his or her duties. As in the case of your personal representative, if you have selected a guardian and alternates who are trustworthy, responsible, and capable of carrying out their duties, you may not feel a bond is necessary. As with personal representatives, it is common for testators to state that no bond is required for the guardians they appoint for this very reason.

If you have any reason to believe that the person you have named to be the guardian of your minor children (or an alternate) may not be trustworthy, responsible, or capable of carrying out their duties, and you want to protect assets of your child in the care of the guardian from the possible mistakes or bad behavior of the guardian, it is a good idea to require a bond.

Note that in many cases a bond will be required of a guardian even if you state in your simple will that no bond should be required.

Changing Child’s Domicile

A guardian of a minor child is responsible for making many different types of decisions on behalf of the child, in the child’s best interests. One of those decisions is where the child will live, the child’s domicile. A court may be reluctant to permit a guardian to change a child’s domicile, especially if a guardian wants to move the child to a different county, state, or even country. If you want to permit a guardian of your child to change your child’s domicile, you can indicate your approval of such a decision in your simple will.

Compensation

Like your personal representative, a guardian for your child(ren) is entitled to reasonable compensation for his or her services. Unlike your personal representative, a guardian cannot be compensated in a fixed amount stated in your simple will. The compensation for a guardian is determined by the court based on what the court decides is “just and reasonable.”

Right to Seek Court Approval for Compensation

We recommend giving your personal representative and the guardian of any child of yours the opportunity to request court approval of their compensation after providing notice of their request to your beneficiaries, heirs, and creditors (the interested parties). After compensation has been approved by a court, it is much more difficult for interested parties to dispute the compensation, which means a fiduciary receiving court-approved compensation can take the compensation without having to worry as much about the possibility of having to pay it back later on in the event of a dispute.

Our simple will template includes model language authorizing your personal representative and guardian of any child of yours the authority to have their compensation approved by the court after providing notice of the request for approval to the interested parties.

Write Your Duties and Powers of Fiduciaries

Personal Representative

Open your copy of the simple will and locate the heading entitled DUTIES AND POWERS OF FIDUCIARIES. Beneath that heading, skip the paragraph entitled In General and find the paragraph entitled Personal Representative. If you have decided not to require your personal representative to obtain a bond and want to grant him or her nonintervention powers, make sure that this paragraph says so, following the model language here:

Duties and Powers of Fiduciaries: Personal Representative, No Bond and Nonintervention Powers

If you have decided to require your personal representative to obtain a bond, but still want to grant nonintervention powers, modify the paragraph to match the following language:

Duties and Powers of Fiduciaries: Personal Representative, Bond and Nonintervention Powers

If you have decided not to require your personal representative to obtain a bond, but not to grant nonintervention powers, modify the paragraph to match the following language:

Duties and Powers of Fiduciaries: Personal Representative, No Bond and No Nonintervention Powers

Lastly, if you have decided to require your personal representative to obtain a bond and not to grant nonintervention powers, modify the paragraph to match the following language:

Duties and Powers of Fiduciaries: Personal Representative, Bond and No Nonintervention Powers

After you have made the above designations about bond and nonintervention powers, use the following highlighted language to complete the paragraph.

Duties and Powers of Fiduciaries: Personal Representative, Tax Elections and Compensation

Custodian

You should not modify the language in the next paragraph with the heading Custodian. Instead, leave that language in place and move onto the paragraph with the heading Guardian.

Duties and Powers of Fiduciaries: Custodian

Guardian

If you have decided not to appoint a guardian in your simple will, you should now delete the paragraph entitled Guardian completely and skip ahead to the part of the instructions, below, for drafting the Fiduciary Compensation paragraph.

If you have decided to appoint a guardian in your simple will and do not want to require the guardian to obtain a bond, edit the Guardian paragraph to match the following language:

Duties and Powers of Fiduciaries: Guardian, No Bond

If you have decided to appoint a guardian in your simple will, but you do want to require a bond, edit the Guardian paragraph to match this language instead:

Duties and Powers of Fiduciaries: Guardian, Bond Required

If you wish to indicate that the guardian is authorized to change your child’s domicile, include the below highlighted language after your statement about the guardian’s bond:

Duties and Powers of Fiduciaries: Guardian, Authority to Change Child’s Domicile

After the above designations about bond and changing your child’s domicile, use the following highlighted language to complete the Guardian paragraph.

Duties and Powers of Fiduciaries: Guardian, Compensation

Fiduciary Compensation

If you decided to appoint a guardian in your simple will, make sure the paragraph entitled Fiduciary Compensation reads as follows:

Duties and Powers of Fiduciaries: Fiduciary Compensation, with Guardian

If you decided not to appoint a guardian in your simple will, change the paragraph entitled Fiduciary Compensation to read as follows:

Duties and Powers of Fiduciaries: Fiduciary Compensation, without Guardian

Note that, if you decided not to appoint a guardian in your simple will, the numbering of the Fiduciary Compensation paragraph will be 7.4 instead of 7.5 because you should have deleted the paragraph Guardian, which was numbered 7.4.

Example Duties and Powers of Fiduciaries

Below is an example of how fully-drafted duties and powers of fiduciaries might look in the simple will of a testator who does not want her fiduciaries to obtain bonds, wants to grant nonintervention powers to her personal representative, and wants to permit the guardian to change the domicile of her children.

Once you have finished editing your duties and powers fiduciaries, go back to the list of instructions.
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