Choosing Trustee, Executor, and Agent Under a Power of Attorney.

trustee

How to Pick a Trustee, Executor, and Agent Under a Power of Attorney

While the term fiduciary is a legal term with a long history, it very generally means someone who is legally obligated to act in another person’s best interests. Trustees, executors, and agents are all examples of fiduciaries. When you pick trustees, executors, and agents in your estate plan, you’re picking one or more people to make decisions in your and your beneficiaries’ best interests and in accordance with the instructions you leave. Luckily, understanding the basics of what each of these terms means and what to consider when making your choices can make your estate plan work far better.

Trustee

trustee-agent-and-power-of-atterneyA revocable living trust is often the center of a well-designed estate plan because it is simply the best strategy for achieving most individuals’ goals. In a revocable living trust, your successor trustee will be responsible for making sure your assets are passed on and managed in accordance with your wishes after your incapacity or death. Like each of the following individuals involved in your estate planning, it’s best to have a trusted person carry out this vitally important role.  Another option is to appoint a financial institution i.e. a corporate fiduciary.
A corporate fiduciary has a wide range of resources and is held to a higher level of standard when. However, it could also be more expensive, especially in the case of a smaller estate.

It’s important to make the language in your trusts as clear as possible so that your trustee knows exactly how to handle various situations that can arise in asset distribution. Lastly, your trustee will only control the assets contained within the trust – not the rest of your estate, another reason that completely funding your living trust is incredibly important.

Powers of Attorney

Your power of attorney is the document in your estate plan that appoints individuals to make decisions on your behalf if you become unable to do so yourself. There are a few different types of powers of attorney, each with their own specific provisions. There is quite a wide range of situations covered by various powers of attorney, and we can help you decide which types you’ll need based on your current situation and future goals. Here are two common types to cover in your estate plan:

  • Durable Power of Attorney (Financial)

Financial power of attorney grant individuals the ability to take financial actions on your behalf such as purchasing life insurance or withdrawing money from your accounts to cover your costs. In most cases, power of attorney are granted to individuals appointed as agents. However, especially regarding financial decisions, a corporate fiduciary can also be named.

  • Advance Health Care Directive (Health Care)

Advance Health Care Directive also covers a wide range of specific actions that can be taken regarding an individual’s medical needs such as making decisions about the types of care you receive.

Executor

Your executor is the person who will see your assets through probate if necessary and carry out your wishes based on your last will and testament. Depending on your preferences, this may be the same person or institution as your trustee. You might also see this position designated as personal representative, but it means the same thing.

You may choose to appoint your spouse, other family members or a friend.  It is important to consider the amount of work involved before placing this burden on your family or friends. Being an executor can be hard work and may have court-ordered deadlines, so it is crucial to pick someone you know who will be up for the job. However, they may hire a CPA to help sort out your taxes or a lawyer to assist in the process or to aid in dispute resolution.  If your estate is large and will be divided among many beneficiaries, a paid executor or a corporate fiduciary is an excellent option.

Get in touch with us today

Let us help you make the process of picking your trustee, powers of attorney, and executor as smooth and headache-free as possible. Once you have these choices in place, you’ll be able to rest easy knowing that your estate plan is in good hands no matter what life brings. Give us a call to make an appointment today.

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