Key Players in Your Estate Plan

/ October 1, 2010
Free from iStock
Free from iStock

While most estate planning attorneys prefer that clients review their estate planning documents on an annual basis to ensure that all key information is kept up-to-date, it is evident that this is not always the case. Since more often than not clients have their estate plans drafted and then file the documents away, never to be dusted off much less reviewed, it is crucial that clients choose wisely when naming others to act as fiduciaries in these important and personal documents.

The key players who are named in a Will are: primary and successor personal representative(s), primary and successor trustee(s) (if applicable), primary and successor guardian(s) (if applicable), and of course, the beneficiaries.  If a health care directive is in place, primary and successor health care agent(s) are also designated, and the same holds true if there is a financial Power of Attorney in place. All of these roles hold a level of significance and selections should be carefully considered. For the most part, choices should include trusted individuals who will be in your life for a long period of time.

The following is a brief outline of each role:

Personal Representative (also known as an executor/executrix or administrator): This person is appointed in the Will as the individual who administers the estate after death.  Usually the personal representative works with an attorney to handle most matters and is the person entrusted with ensuring that final wishes are carried out.

Trustee: If there is a trust in place for either spouse, children or other beneficiaries, the trustee oversees such accounts to ensure the assets held in trust are being distributed properly and invested correctly.

Guardian: If minors are left without parental care and guidance, the guardian is the individual with whom the children will then live.

Beneficiaries: These are individuals named as recipients both in a Will and/or any policy listing a beneficiary, such as a life insurance policy or retirement account.  It is customary to list a spouse as the primary beneficiary and children as contingent beneficiaries.  However, others, such as relatives or friends may also be listed depending upon certain circumstances or personal intentions.

Health Care Agent: This individual is entrusted to make medical decisions in the event of physical incapacity and can also be nominated to act as guardian and conservator should you be mentally incapacitated.

Attorney-in-Fact: This individual is appointed to handle finances and assets if necessary.

The above roles require individuals who are mature, trustworthy, reliable, willing and able to carry about specific actions for you.  Certain life changes affect relationships and friendships, and although updating a Will is not uncommon, many people forget or choose not to make changes to their documents.  For that reason, it is advised that you take the utmost caution when selecting individuals to fulfill these crucial roles.

While it may seem “proper” to appoint the oldest child or sibling to be the personal representative of an estate, maybe it is the youngest who is more financially savvy and responsible.  Yes, a best friend may seem to be the perfect health care agent; however, when emotions are involved, your friend’s decision-making abilities may become clouded.  In addition, it is important to keep in mind that the friends or family members who already have a large family of their own may not have the time and energy to provide the best care as guardians for your minor children.

The decision is completely yours, so when deciding who to name in your documents, consider the following:

1.     Can they fulfill the roles/duties/responsibilities of the position?

2.     Do they know and understand your values, beliefs and wishes? and

3.     As beneficiaries, are they the appropriate recipients of your estate?