Overview

An estate plan asks the client to name individuals for a variety of responsibilities – responsibilities that differ from one another and may lead the client to determine that more than one person is best suited to fill each of these roles.

Executor/Trustee

For the client

The executor of a will is responsible for following the directions set forth in the will – in other words, fulfilling the wishes of the person who passed away.  The executor has a fiduciary responsibility to the beneficiaries of the will.  This responsibility includes distributing specific gifts and acting prudently when selling estate property and distributing proceeds to the beneficiaries.  The executor may also have to make court appearances and submit reports to the court.  This role can be time consuming and require an attention to detail (but, an executor can also utilize the assistance of an attorney to navigate their duties).   A client will want to consider an individual who is capable and willing to serve in this role when the time comes.

Trustee for Testamentary Trust

In cases where the client has minor or disabled children, they may elect to have a trust created by their will (known as a testamentary trust).  This trust would go into effect upon the death of the client and appoint an individual to manage the assets that are to be distributed to the children until they come of age.  The trustee of the trust could be the same individual selected by the client to be their executor.  However, the client may decide a different person is best suited to serve as trustee.  For example, the big difference between an executor and trustee is the length of time they serve in their roles.  An executor may be able to collect, report and distribute the estate assets in a few months, while a trustee of a minor’s or special needs trust may be responsible for managing and distributing assets for many years.

Attorney in Fact/Agent

Durable Power of Attorney

The Attorney in Fact/Agent named in a Durable Power of Attorney obtains rights to act on behalf of the client for most financial decisions (the client can specifically enumerate the capacity in which the Attorney in Fact can act on his behalf).  This capacity does not typically include any authority to make decision on the personal or medical care of the client.  A client may seek out someone who they trust with their assets as well as someone who is sophisticated or has experience with making financial decisions and/or managing assets similar to what the client owns.  The level of involvement an Attorney in Fact will have largely depends on what has already been setup by the client.  In some cases, the Attorney in Fact may simply be in touch with financial planner or property manager that the client has already hired.  Their role would be to monitor these third parties, review their reports, and approve recommendations by these “experts.”  In other cases, the client may entrust asset decision making to the Attorney in Fact without the advice of third party experts.  The client should take time to contemplate the level of responsibility is gives to its agent depending on the agent’s knowledge, skills and abilities.

Medical Power of Attorney

The medical power of attorney grants authority to an agent to make decisions regarding the client’s personal care and medical decisions.  This responsibility is much different than the authority granted in the durable power of attorney.  Here an agent would be following the wishes of the client outlined in the Medical POA and also making decisions on behalf of the client to the extent directions are not specifically outlined in the POA or other document (i.e. living will, do not resuscitate form).   These types of medical decisions can carry much more emotional feelings than financial decisions.  The client may determine that different individuals are best suited for each of these roles.

Guardian of Client’s Minor Children

There are a number of practical considerations when choosing a guardian for minor children.  The existing relationship or familiarity of a potential guardian with the children may be an important factor.  Would the client want their children to be cared for someone the children already know, like an uncle, aunt or close family friend?  Or does the client wish to name a person who they feel would be a positive role model even though the children may not have spent much time with this person?  The location of the guardian’s residence should also be considered if it is far away (i.e. out of state) from the children’s current residence.  A client should consider the impact of uprooting a child’s life – school , friends, activities for purposes of placing them with the named guardian.

A client can name a guardian directly in their will or execute a separate document.  The advantage of a separate document is that the instrument can be easily modified as circumstances of the family and/or guardian change over time.