Appointing Positions of Trust in Your Estate Plan

Among the biggest decisions you will make while estate planning is who to place in various positions of trust to handle your affairs. These people are called “fiduciaries” because they have legal obligations to act in your interest.  This is one of the tasks involved in how to write a will. Below is a list of positions you may need to fill, and what each of them does.

Executor:

The executor is responsible for winding up your worldly affairs and carrying out the instructions in your will.  This person pays your final bills, finds and contacts your creditors, closes your accounts, takes care of your possessions and business until they can be sold or handed over to your heirs, and makes decisions about how and when to distribute your estate.  The executor can hire people to help, such as an attorney, a tax accountant, a financial consultant, etc., but all the decisions are made by the executor.

You should name two or more executors who can serve as substitutes if the first person you name cannot serve.  You can name co-executors, but that can be tricky as the two people will have to be able to cooperate with each other.

If you don’t name an executor, or if no one you named can serve, the court will appoint one. However, a court appointed executor must post bond.

Guardians:

If you have children under 18, you will want to name guardians for them.  There are several different scenarios.

  • If there is another parent alive, they will be put into the physical care of the parent, even if you name a different person.  If there are unusual circumstances, such as a parent who is incarcerated, has a history of abuse, or is mentally incapacitated, you should talk to your attorney about options for your children.
  • If there is another parent, but you are divorced or have never married the parent, that parent will get physical custody of your children, but you can create a trust for any money you may leave your children.  You can then name a trustee who will have discretion to distribute the money for the care of your child, and to distribute the money to the child as you instruct after the child reaches 18 or an older age.  You will want to name a trustee who is organized, trustworthy, and, preferably, knows you or your child.  However, if there is a large amount of money, you can name a bank or corporate trustee and appoint a family member or friend to act as consultant to the trustee in deciding how to use the money for your child.
  • If there is no other parent, you will name a guardian to take care of your child.  This person will be responsible for caring for and bringing up your child, and will have all the abilities that you as the parent have.  You can name an individual or a couple. If you name a couple, you must specify whether the guardianship changes if the couple is no longer married.  For example, you want your sister to raise your child, and so you name “Mr. and Mrs. Smith” as your guardians.  But suppose sister dies?  Did you really want her husband to raise your child even if your sister was no longer around?  Be clear about your wishes.
  • If there is no other parent, you will also have to name someone to take care of your child’s money.  This can be the same person you named as guardian to raise the child, but often it is not.  You may have one sibling who would be a wonderful parent, but is not very good at handling money.  You can name another sibling to act as trustee for your child. 
  • You do not need to name a family member as guardian or trustee.
  • If you fail to name a guardian for your children, the court will appoint one.  Guardians in this case are usually close family members.

Power of Attorney:

If you create a power of attorney for yourself, you will need to name someone whom you trust to take care of your personal and financial affairs.  This power can be used at any time you cannot take care of your own affairs, whether or not you are actually disabled.  However, this power ends at your death. Only the executor of your will can handle your estate.

Medical Power of Attorney:

You may name a person who can make medical decisions for you if a doctor certifies that you are not able to make your own decisions.  You can also name alternates who can serve if others that you name are not able to do so.

Trustee:

This person is responsible for carrying out the instructions in your trust.  The trustee makes decisions about distributing the money in the trust, in accordance with the guidelines you set up.  A trustee should be responsible and careful with record keeping.  The trustee, can, however, hire professional assistance as needed, such as on administration of the trust. 

 HIPPA form:

The HIPPA release allows you to name persons who may have access to your otherwise private health information.  In addition to giving the person access to doctors and hospital staff, this form is often helpful when a family member or friend wants to help in dealing with health insurance claims and other administrative matters during a health crisis or temporary disability.

 

Digital Assets:

Spend some time considering the various online accounts you have, as well as any websites, blogs, or sales pages, and decide which of these you need to provide instructions and access to.  Depending on your personal choices, these items may be dealt with in your will or in some other way, so initially you merely need to make a list of what you have, which accounts you want to leave access to, which you want to disappear, and what person(s) should handle each of these accounts.

Parker Counsel Legal Services helps clients in Texas, Massachusetts, New Jersey, and New Hampshire prepare estate plans for their individual circumstances. Find out how we can help you – schedule a short phone call, email us at legal@parkercounsel.com or call 833-733-2668

Eighteen and armed . . . with all the best documents!

I love having 18 year olds in my office.  They signal they are listening intently to me by making their eyes wide and keeping them trained on me while I talk, but the slight glaze over the eyeball is obvious as they nod and agree and pretend like they understand everything we’recollege students talking about.

Now, don’t get me wrong, they DO understand, but they don’t UNDERSTAND.  They know that the power of attorney means someone else can access their bank account and get money to pay the landlord if for some reason they can’t do it, but they don’t really get why that matters.   They understand that the HIPAA form means everyone they list on it will be able to call the hospital and get information on their condition if they wind up in a car crash far from home, but they don’t really know why we think that might happen.  They understand that the FERPA release will let their parents arrange for a leave of absence from their college if a medical emergency lays them low for a few months, but they really kinda think we’re being ridiculously anxious about things that will never happen.

They don’t yet understand that life is unpredictable.  They don’t yet understand that the unpredictability can cause problems that last for years if they are ignored.  They don’t yet understand that it’s easier to prevent a major problem with a little planning than it is to try and clean up a problem that has grown to an intrusive problem.  They don’t understand that one eviction for nonpayment of rent, one default on tuition payments, one medical emergency where an insurance company gets away with denying services that should have been covered can all have far reaching consequences that affect their life and options for years to come.

But parents understand.  So every 18 year old client that I have, sitting in front of me while I explain the personal legal documents that every adult should have, has a parent or two sitting in the waiting room, who understand.

It’s easy to book an hour and a half appointment for your young adult to complete all the personal legal documents every adult – even young ones – should have.  Give us a call at 833- RED-BOOT (833-733-2668) or email legal@parkercounsel..com  Whether you’re in Austin, TX, Western Massachusetts (Amherst, Northampton, Springfield, the Berkshires) or Northern New Jersey.