We’ve had some questions lately about the roles people play in estate plans. These people (which lawyers call a “fiduciary”), include your personal representative, your trustee, your “agents,” and the guardians for your minor children.
Personal Representative
Your Personal Representative (or “PR”) is a person you designate in your Will. His or her job is simply to wrap up your financial affairs after you die. (The out-of-date name for this job was the “executor.” We don’t use that term anymore.) The PR gathers together and appraises your property, pays your final expenses, and distributes your property to your beneficiaries.
Trustee
As part of a well-designed estate plan, you might create a trust in your Will or as a separate document. If you do, you will designate a Trustee of that Trust. The Trustee is responsible for the management and distribution of the assets in the Trust. The role of Trustee is varied, depending on the purposes for and assets in the Trust. He or she may need to make investment decisions, buy or sell assets, manage business interests, and determine when and how much to pay out to your beneficiaries. As the name implies, you need to have a lot of trust and confidence in the abilities of your Trustee, because he or she has significant responsibility for your Trust’s assets and anyone who relies on that Trust.
Agents
If you sign a Power of Attorney, commonly for healthcare or finances, you will designate an “Agent.” That person is authorized to act on your behalf in making medical decisions if you are unable, or in transacting your financial business. Depending on the wording of the Power of Attorney, your Agent could have complete authority to engage in financial transactions on your behalf. This could include opening and closing bank accounts, buying or selling houses, or even making gifts of your assets.
Guardian
A Guardian is a person who cares for someone who is unable to care for themselves, typically a child or a disabled person. In your Will, you should designate a person to be the Guardian of any of your children who are minors. In the event of the death of both parents, a Court will appoint a Guardian for your children and, if you have designated a person in your Will, the Court will almost always appoint that person.
How to Choose?
Choosing who should serve in these various roles is a difficult decision and one that should be given some thought by all adults. Even people in their late teens and 20s need to designate Agents under Powers of Attorney and probably a PR under a Will, even if they do not need Trust-based planning and have no children. Counseling clients on whom to appoint for each of these fiduciary roles is one of the many services provided by Learned Lawyer when preparing estate plans for clients. If you or a loved one needs some guidance on choosing people to serve as your fiduciaries, contact Learned Lawyer or schedule a free consultation today!
