While the term fiduciary is a legal term with a rich history, it generally means someone who is legally obligated to act in another person’s best interest. Trustees, executors, and agents are examples of fiduciaries. When you select people to fill these roles in your estate plan, you are picking one or more people to make decisions in the best interests of you and your beneficiaries and in accordance with the instructions you leave. You should also choose multiple backups for each of these roles in case your first choice is unable or unwilling to act when the time comes.

Understanding the basics of what each role entails and what to consider when making your choices can help ensure that your estate plan is effective.

Trustee

A revocable living trust is often the center of a well-designed estate plan because it is the best strategy for achieving most people’s goals. You (as the trust maker) will usually serve as the initial trustee and continue to manage the trust’s accounts and property in the same manner that you did before the trust was created. You will appoint a successor (backup) trustee in the trust agreement to be responsible for ensuring that your wealth is managed in accordance with your wishes after your death or during your incapacity. Your successor trustee will control only the accounts and property owned by the trust. It is best to have a trusted person or financial institution carry out this vitally important role.

Powers of Attorney

Powers of attorney are the documents in your estate plan that appoint individuals to make decisions on your behalf if you are alive but unable to do so yourself. There are a few different types of powers of attorney, each with their own specific areas of responsibility. Here are two common types to include in your estate plan:

• Financial Powers of Attorney

Financial powers of attorney grant the fiduciary you select the ability to take financial actions on your behalf, such as withdrawing money from your bank accounts to cover your expenses. A fiduciary who acts under the authority given in a financial power of attorney is generally called an agent. Your agent is only able to manage the accounts and property that are not owned by your trust. If an account or property is owned by the trust, it is the responsibility of the trustee to manage that item. You can name an individual as your agent or, in some circumstances, you can name an institution, like a trust company.

• Healthcare Powers of Attorney and Related Documents

A healthcare power of attorney allows you to name a trusted person to make or communicate your medical decisions on your behalf when you cannot do so yourself. These decisions may range from deciding what surgeon to use to whether to remove you from life support. Other documents can be used in conjunction with the healthcare power of attorney to cover specific actions that can be taken regarding your medical needs, such as making decisions about the types of care you wish to receive or who can access your medical information.

Executor

Your executor is the person who will see your accounts and property through probate, if necessary, and carry out your wishes based on your last will and testament if you have one. Depending on your preferences, your executor may be the same person or institution as your successor trustee.

Being an executor can be hard work and may have court-dictated deadlines; it is crucial to pick someone you know will be up to the job. They will probably need to hire an accountant to help sort out your taxes and a lawyer to assist in the process.

Get in Touch with Us Today

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