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Understanding Roles & Responsibilities Included In An Estate Plan

There are some important things to consider when choosing your advocates.

By Origin

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May 7, 2024

When you are considering who to designate when creating an estate plan, think about, "Who can best step into my shoes and perform tasks that I would perform if I were able?"

While your power of attorney agent, executor, or trustee does not have to be a lawyer or accountant, they should be responsible enough to address matters promptly. They should also know when to hire professionals, maintain communication with family and other third parties, and make decisions in your best interest, your estate, and your legacy. The following are estate planning roles that you may be called upon to fill as part of developing and maintaining your estate plan, along with critical responsibilities that the position entails.

Executor

The responsibilities of an executor in the last will and testament include reviewing with the estate beneficiaries the customized terms of the will, gathering asset and debt information of the deceased, securing and maintaining assets, paying bills and debts of the deceased using estate assets, distributing estate assets pursuant to the customized distribution schedule as described in the will, closing accounts, as well as handling digital and other accounts in the name of the deceased.

Guardian

If you have minor children, part of your estate plan will involve designating the legal guardian for your minor children. This guardian will have parental rights and responsibilities over your children after you pass away - until your children reach the age of majority. Guardians of minor children have custody of the children, and they have the authority to make decisions regarding the care, education, and upbringing of minor children.

Trustee

The specifics of a trustee's responsibilities and rights are described in the trust document and relevant trust laws. It's essential to understand the powers instilled in the trust and the duties required of the trustee. Any trustee needs to fully understand whether they are an initial or alternate trustee, a trustee alone, or co-trustee with others. They'll need to review the actual will or trust documents that appointed them to that trustee position. As a trustee, your responsibilities may include: managing trust assets, making distributions to a beneficiary for their health, education, maintenance, or support, making distributions to a beneficiary under a specific schedule that the person who created the trust customized. The trustee is also responsible for providing information and accounting periodically to the beneficiaries of the trust.

Agent (Durable Power of Attorney)

A general durable power of attorney is an integral part of an overall estate plan. It could be critical to the success of your estate plan to appoint the right person or people, as your agent, to handle your financial and property matters should you become incapacitated during your lifetime. Appoint someone you are confident has your best interest at heart, who has the skill and time to take on the job, and who can communicate well with other family members. Don't worry much about hurting the feelings of someone you do not name as your agent - it's more important to have the right people fill that role. In addition to naming your agent, consider whether it makes sense to name a co-agent or an alternate agent. We don't know how many years into the future your agent will need to act, so you may want to name at least one alternate agent. And practically, most married people with adult children name their spouse as their first agent and one or more of their adult children as their alternate agents.

Health Care Agent (Health Care Power of Attorney)

A health care power of attorney is a document where you name someone as your health care agent to make decisions about your medical care when you cannot make those decisions for yourself. Think of your health care power of attorney agent as someone who can discuss treatment decisions with your doctor while in surgery, in terrible pain, or if you can't communicate your health care treatment desires. A living will is a document that allows you to make your own decision regarding end-of-life medical care. A living will can help family members and loved ones during a time when they may be anxious and distraught. Your living will can remove major decisions and burdens on loved ones, such as the decision of whether or not to continue the use of a life support machine. The living will is your instructions regarding end-of-life treatment that must be honored by family and physicians, while the health care power of attorney is where you appoint an agent to make all other medical decisions when you can't. Note that some states bundle the living will with the health care power of attorney in an advance healthcare directive document.

Summary

Understanding the roles and responsibilities of an executor, guardian, trustee, and power of attorney agent is essential when creating and amending your estate plan. When deciding on who should fill these roles, consider whether they have time to devote to their role, whether they are willing and able to fulfill their role, whether they are familiar with your affairs and your wishes, and whether they possess sound judgment and integrity. Take the time you need to choose people who have the desire, willingness, and ability to see your wishes through.