Estate planning is full of big decisions, and thinking “who do I name in my estate plan?” is probably the biggest one. In your estate plan you’ll be naming the people whom you wish to take over your finances, assets, and administering your belongings. It can be a tough decision. Here is a breakdown of who you are naming in your estate plan and ways to pick the best candidates.

Who Do I Name in My Estate Plan?

We have previously written a guide to the key roles in your estate plan. It’s important to understand each role and their responsibilities so that you can make the best decisions when it comes to your plan. In your estate plan you’ll be naming:

Executor- The executor of your estate is in charge of handling the administration of executing your estate plan. This includes taking inventory of your assets, paying necessary taxes and debts, filing documents, distributing the assets to those you have named as beneficiaries, and handling the probate process if necessary. This role can take years to complete so you should designate someone who is both responsible and who has the capacity to undertake the responsibilities. You may also name more than one person as an executor or have back up choices just in case.

Trustee- A trustee may seem similar to an executor, but their role is more on the side of managing your financial assets. This can even be done during your lifetime versus an executor who is distributing your assets after your death according to your wishes in your will or trust. Trustees will manage bank accounts, investment decisions, paying bills, and any management tasks that are necessary.

Guardian- There are a few definitions for when a guardian may be necessary for your estate plan. If you have minor children and you pass away, you will name a guardian to care for them. This is the definition of guardian that most people think of when they hear the word, but adults can also be assigned a guardian. This would typically be if you are in an accident and become incapacitated or unable to care for yourself or make decisions.

Power of Attorney- There are two types of Power of Attorney that you should know. You may also hear these people labeled as “agents” in your estate plan. It’s important to choose someone who would make decisions for you both medically and financially.

  • Healthcare Power of Attorney– This person would make decisions regarding your medical care, or would advocate your wishes as stated in your living will, in the event you become incapacitated.
  • Durable (Financial) Power of Attorney– This person would handle your financial affairs should you become incapacitated. They would manage your bills, make arrangements for the care of your home or property if necessary, and make financial decisions.

Beneficiary- A beneficiary is a person who you are naming to receive benefits or assets from your estate once you pass away. They wouldn’t have any responsibilities such as distributing the assets, they would simply be receiving what you leave to them. It would be the responsibility of the executor or trustee to distribute the assets to the beneficiaries.

Putting the ‘Trust’ in Trustees

It’s no coincidence that you find the word “trust” as a part of “trustee”. If you or a loved one has a trust, the individual named as the trustee will become responsible for administering the trust in the event of a death or incapacity. One of the reasons you’re choosing someone as a trustee is because you trust them. But if you are just starting your estate planning process, or maybe taking a look at updating things, do you know how to pick the right trustees?

What should I look for in a trustee?

Because of the weight of the responsibility that comes with being a trustee, it’s important to name someone who you know will act in the best interests of your estate. A trustee should not only be trustworthy, but also should be responsible in the sense that he or she can handle the many administrative tasks that come with administering a trust.

Here are some qualities to look for in a trustee:

  • Trustworthy
  • Willing to work with others
  • Organized
  • Understanding of your family values
  • Can make responsible decisions
  • Other factors to consider:
    • Legal age
    • Free time to commit to the task
    • Citizenship
    • State residency
    • They are in good financial standing (no tax issues or massive debts)

Remember, your estate plan is not set in stone. Estate plans can and should be updated as needed and that includes the ability to change trustees or beneficiaries and appoint joint trustees. We can help guide you through a new plan or updating your plan, no matter how complex your situation may be. Contact us and let us help you get started.

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Disclaimer: This article is intended to serve as a general summary of the issues outlined therein. While this article may include general guidance, it is not intended as, nor is a substitute for, qualified legal advice. Your review or receipt of this article by Lexern Law Offices, Ltd. (the “LLG”) or any of its attorneys does not create an attorney-client relationship between you and the LLG. The opinions expressed in this article are those of the authors of the article and does not reflect the opinion of the LLG.