Choosing the right person to carry out your wishes
Your estate plan won’t execute itself. You need to choose a trusted person (or persons) to carry out your wishes in accordance with your plan. Depending on the estate plan you set up, you might need a trustee, an executor, a guardian for your children, or an agent for a power of attorney or advance healthcare directive.
Oftentimes, many of these roles are filled by the same person, and other times you will want to choose different people for each role. You should choose carefully when you appoint someone. They will have a large amount of authority and control over your property and sometimes even your life. The wrong person can make things very difficult for you and your loved ones.
If you have a living trust, you will need to name someone as trustee (if you’re the initial trustee, this person will be the successor trustee). The trustee is responsible for managing trust property and carrying out the terms of the trust.
With a will (even a pour over will), you name an executor (also called personal representative or administrator). Your executor will be responsible for administering your estate through the probate process: gathering and inventorying your assets and distributing them (eventually) to your beneficiaries.
Both of these parties have a significant amount of control over your assets. This is especially true of the trustee, who is not under the supervision of the court. A bad trustee can mismanage the trust assets, anger beneficiaries by failing to keep in contact or make required distributions, or even flat out steal trust property. It can be difficult to recover property or money stolen by the trustee, even with the remedies available by going to court.
The person you place in either of these positions should be of the utmost integrity. Additionally, they should be responsible, communicative, good with money, and ideally, they should get along with the beneficiaries. If you feel you don’t have someone that fits the bill for a good trustee, you may want to consider appointing a corporate trustee, like a bank, to handle your estate administration. Corporate trustees can avoid much of the family drama that can crop up in these situations.
Guardian for minor children
Choosing a guardian for your minor children might be the most important decision in your estate plan. While it is ultimately up to the court to appoint the guardian, your nomination will generally be given a lot of weight. For this reason, you want to think very carefully about who you choose. Some important considerations to take into account are:
- Willingness and ability to take on the role: Is the person willing to look after your children? Are they elderly or in poor health? Do they have the financial resources to take care of your children
- Relationship to child and other family members: Do your children know this person and have they spent a lot of time together? Do your children like the person? How likely are they to be happy with the new family? Will your guardian facilitate the child’s relationship with other family members? Does the guardian live far away from everyone else?
- Beliefs and values: Do your guardian’s values or religious beliefs line up with yours? How well will they raise your children in the way you would want them to be raised?
- Single or married couple: Are you nominating a single or married person? If they split up, with whom will the child go?
These are just a few of the things you want to think about when choosing your child’s guardian. They will be responsible for taking in your children, providing for their day to day needs, and raising them to adults. Make sure you talk to them about your wishes beforehand and give a lot of consideration to this decision.
Agent for power of attorney
A power of attorney (POA) grants someone you choose the power to act as your legal agent (sometimes called your representative or attorney-in-fact) if you become incapacitated or otherwise unable to handle your affairs. A financial POA allows your agent to make financial decisions for you (like accessing bank accounts), while a healthcare POA allows them to make healthcare decisions (i.e., what medical treatment you receive). A healthcare POA goes hand in hand with an advance healthcare directive so your agent knows what decisions you would want them to make.
It’s certainly more convenient to have the same person act as POA for both. However, there may be occasions when you decide to choose different agents for each. For instance, if your ideal agent for your financial POA has religious beliefs that would preclude them from authorizing certain medical treatments, then you might need separate agents. However, in that case, it’s important that you choose agents who are likely to work well together for your best interests.
There are many horror stories of bad trustees or other appointed representatives taking advantage of their position. Think carefully about each person you choose, and consider not only their relationship to you, but also their relationship to your family members for whom they will be responsible.
Helix Law Firm can help with estate planning
The person you choose to handle your affairs after you’re gone is as important as the estate plan itself. If you’re interested in learning more about how Helix can help, please call us at (619) 567-4447 to schedule a free consultation.