Important Roles In Your Estate Plan
What is a trustee, personal representative, attorney-in-fact, your health care proxy? These are all important jobs and it is important to think about who in your life can fulfill the responsibilities as you begin to build your estate plan.
A trustee is a person that holds and manages property for the benefit of another. In a living trust, the trustee is also the maker, or grantor, of the trust. In an irrevocable trust, or once the grantor of a living trust dies, the trustee is independent of the maker. Trustees make important decisions about managing and tracking trust assets, distributing assets to beneficiaries according to the terms of the trust, maintaining records, and keeping trust property separate from their individual property.
Trustees can be a trusted friend or family member, an estate planning attorney, or a corporate trustee like a trust department at a bank. This last option is good for complicated trusts with large amounts of assets. Finally, the trustee can be the maker of the trust when we create a revocable trust, also called a living trust.
A personal representative is a person named in a will who will be responsible for managing the decedent’s estate. The personal representative will gather, inventory and account for estate assets, pay valid debts, maintain estate property, and distributing assets to beneficiaries.
A durable power of attorney will name an attorney-in-fact to manage assets in the event of incapacity. This person will have authority to manage your finances and property in the event of a medical event that makes it impossible for you to act on your own. For example, an attorney-in-fact will be able to make sure insurance is maintained, mortgage payments are made, and tax returns are filed.
Health Care Proxy
A health care proxy will name a proxy to manage your medical care in the event of incapacity. This person will have authority to speak with your doctors about treatment and care. A HIPAA authorization will allow them to access medical records so that they can make the best decision on your behalf. A Living Will can leave instructions to your health care proxy on what treatments you would or would not want in the event of incapacity.
Balancing Strengths and Weaknesses
You may choose to have one person in your life fulfill all of these roles, or you may choose specific people to fulfill specific roles. When making your decision, think about the strengths and weaknesses of the people in your life. A son in the nursing field may make a great health care proxy, while a daughter in accounting would make a fantastic choice for your durable power of attorney and trustee. Speak with people in your life before choosing them, and convey to them your wishes in the event of your incapacity or death.
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