Estate Planning - Question #2:
Who should I name to serve as my Executor, Trustee, Guardian for my minor children, and Agent?
It is not uncommon to devote significant time at an initial estate plan consultation to discussion of the fiduciary roles to be assigned (Executor, Trustee, Guardian for Minor Children, Agent under Power of Attorney). Many clients express concerns, at the start, about (1) what these roles entail, (2) whom to select, and (3) what happens if they later change their mind. Here, we will address each of these concerns and how our team typically guides clients through this important topic.
An Executor is the person named in a Will who is charged with gathering and distributing assets to the beneficiaries named in the Will, paying final expenses of the decedent, and assessing whether the county probate court will require filings.
- Time of Service: As a general rule of thumb, most Executors serve for at least one year after the decedent's death.
- Attributes: Executors should be organized, efficient, and fair to the beneficiaries whom they serve.
A Trustee is the person named in a Revocable Trust who is charged with locating Trust assets and distributing them to the beneficiaries of the Trust, sometimes paying expenses of the decedent, and following the terms of the Trust exactly. There are often precise guidelines on distributions that the Trustee must follow, although occasionally the Trustee is given discretion in how he or she performs certain duties.
- Time of Service: A Trustee can serve for any length of time, sometimes for several months or sometimes for many years, depending on the terms of the Trust.
- Attributes: Trustees should be organized, efficient, and fair to the beneficiaries whom they serve. They may also need to possess good financial skills to deal with the job functions assigned to them.
The Guardian is the person named in a Will who is nominated as the most suitable person, in a parent's opinion, to take physical custody of minor children, or any child under the age of eighteen (18), at the decedent parent's death. While a court of law will always look first to the “best interest of the child” standard in selecting an appropriate Guardian, the wishes of a parent outlined in a legally binding Will are heavily weighted.
- Time of Service: Until the minor child attains the legal age of majority, which is 18 years of age in most states.
- Attributes: Guardians should obviously hold the well-being of the minor child(ren) as paramount and should also be willing and capable to serve in this role.
An Agent under power of attorney is named during someone's lifetime to assist with financial affairs or health care decisions.
- Time of Service: Unless otherwise revoked, from the time of appointment until death.
- Attributes: For financial powers of attorney, the Agent should possess trustworthiness and at least basic financial literacy. For health care powers of attorney, the Agent should hold the client's well-being as paramount and may sometimes be called to make difficult health care decisions.
Whom to Select
In any estate plan, the fiduciary roles should place the right people in the right seats. It is imperative that the selection of the individuals or entities named in the roles is not rushed or made in fear.
Precise consideration should be given to each role as if it were a job and the client is “interviewing” candidates who are best suited to carry out the job's responsibilities. Therefore, care should be taken to avoid selecting fiduciaries because the client is worried about how others will perceive the selection or in an effort to be “fair”. Good selection requires an assessment of family, friends or corporate entities who will act in a way consistent with the client's objectives and also abide by the terms spelled out in the legal document itself.
We understand that not every client can make straightforward and swift choices. However, our attorneys are skilled at thoroughly explaining the various roles and answering questions before final decisions are made.
When to Update Estate Plan Documents
Fortunately, decisions made now can always be changed later, assuming the client still has mental capacity. In other words, Wills, Trusts, and Powers of Attorney may all be revoked or amended, in whole or in part, during life and as long as the client understands the impact of such decisions. This is one reason we recommend regularly reviewing estate plan documents to ensure the roles are still being fulfilled by trusted and capable fiduciary agents with whom the client has a good relationship. Death, divorce, aging, and a shift in the relationship dynamic can be cause to re-visit selections.
On occasion, clients have shared that they delayed or avoided their estate planning due to indecision or anxiety related to the roles described. Do not let this happen. Ultimately, a decision made is always more powerful than a decision lacking, even if a later update may be required.
Contact our office with questions about the roles in an estate plan or to discuss the various choices in more detail. We are passionate about delivering clear guidance and allowing our clients the space to contemplate these roles and their options well in advance of the signing appointment when the legal documents take effect.
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