Estate Planning: Who To Select to Fulfill your Plan?

One of the most important choices you make in your estate plan is who you select as your fiduciaries and agents. Those choices include: executors, trustees, guardians, power of attorney agents and health care proxy agents. As you work through your estate planning process, you will want to give careful consideration to who you pick for these roles. A brief overview of the different positions follows, with some factors to consider when making your choices.

Executor of your Will | The executor of your will is responsible for the administration of your estate. The executor will collect your assets, pay your bills, and distribute the balance of your estate to your beneficiaries. The executor will serve for at least seven months, but could serve for longer, depending on the complexity of your estate.

Trustee of your Trust | The trustee will manage the income and assets of your trust, pay the bills of the trust, and distribute the trust income and principal to its beneficiaries. Depending on the terms of your trust, the trustee may act for several years.

When you choose an executor or trustee, it is important to choose someone who is organized, diligent, and reasonably adept with finances. Your executor or trustee will likely utilize the services of professionals, such as attorneys, accountants, and financial advisors, but they have an independent duty to do their job properly regardless of whose services they employ.

People often choose close and trusted family members or friends to act as their executors and/or trustees. In addition, many financial institutions, like local banks or trust companies, can perform those services. People will sometimes pick a close friend or family member but have a financial institution act as a successor in the event their first choice becomes unable to act due to death, disability, or resignation.

Guardians | An important choice for parents with children is who they will choose as the guardian of their children in the event that they both pass away while the children are still minors. The chosen guardian will act with regard to the financial and personal affairs of the children – essentially acting as a surrogate parent.

In choosing a guardian of your minor children, you should consider who amongst your family and friends shares your values regarding child rearing. You want someone who would basically make the same or similar decisions regarding your children’s upbringing, i.e. what school they attend, whether they are raised within a particular religious faith, and what decisions should be made regarding their medical care.

Parents of disabled children have similar choices. It is advisable to establish your guardianship of your disabled child when you are living and to have a successor guardian in place when you pass. People will often choose another one of their children as successor guardian of their disabled child.

Power of Attorney Agents | A power of attorney is an important part of your overall estate plan. The agent you select under your power of attorney must be someone you trust implicitly, because they will potentially have the ability to handle your finances with all the authority that you yourself have.

Married people typically choose their spouse and then a child as a substitute. For those who are not married or do not have children, people usually choose a trusted family member, friend, or professional. You should choose someone who has a similar skill set to a prospective executor or trustee, i.e. someone who is organized, diligent, and reasonably adept with finances. It is important to remember that if your power of attorney is durable, it will continue to be effective if you lose your mental capacity.

Health Care Proxy Agents  | A health care proxy agent is authorized to make your health care decisions for you in the event you are no longer able to make them for yourself. The decision making is often informed by your written living will, which describes your wishes regarding your medical care.

The appropriate person to choose as a health care proxy agent may have a different skill set than the other agents and fiduciaries listed above. Although they may not be adept at finances, they may be uniquely qualified in your opinion to make medical decisions, because they have medical training or because they have a specialized knowledge of what your wishes would be.

As you prepare to do your estate planning, you should remember that you are not just deciding whether to do a will or a trust or some combination thereof, but you are also assembling a team of people to put your plan into effect. You should take the time to consult with an estate planning professional and make your choices wisely.

Attorney Matthew J. Dorsey, who is based in our Saratoga office, has over twenty years of practice focused on elder law, estate planning and estate administration. He is available to discuss your estate planning needs.