Selecting Your Fiduciaries (e.g. executor, trustee, etc.) (updated for 2013)

As part of the estate planning process, you will have to make some very important choices.  Some of these choices include who will care for your minor children if you can no longer do so; who will manage your property if you become incapacitated; who will make sure that your personal needs are met if you become unable to care for yourself; and who will make sure that your health care wishes are followed. These are some very personal decisions, and each individual, whether married, single, in a long-term relationship, or in a registered domestic partnership, should choose the people he or she trusts the most to fill these roles. The following may help you decide whom to choose for these important roles.

Executor of your will

Your executor will be in charge of probating your estate, if applicable, paying your debts, distributing your assets, and winding up your affairs. He or she will need to be trustworthy, as well as capable of dealing with the courts, winding up your finances, and interacting with your beneficiaries. The process will likely require a significant amount of your executor’s time, and there is a lot of responsibility involved. Choose someone you trust, and someone that you know can handle the role.

You should choose one or more alternates, in case the person you nominate first is unable or unwilling to perform the duties of an executor. You can also amend your choice anytime, so long as you retain the legal capacity, if your current nominee is no longer an appropriate choice in the future. 

Attorney-in-fact for Property (under a Durable Power of Attorney)

Your agent or attorney-in-fact for property is a person you appoint to manage your assets on your behalf should you ever become unable to do so yourself. The role is similar to that of a trustee, but for your assets that are not in a trust. Your attorney-in-fact does not have to be an attorney; it can be anybody you trust to make decisions for you. You should choose someone who is trustworthy and has the time and ability to do a good job handling your assets. 

Such authority can be limited to special circumstances, or it can be general. You can make it effective now, or not until a specified future date or event, such as your incapacity. You can authorize your agent to simply pay your bills, or you can empower them to handle nearly all of your affairs.

You should choose one or more alternates, in case the person you nominate first is unable or unwilling to perform the duties of an attorney-in-fact. You can amend your choice anytime, so long as you retain the legal capacity, if your current nominee is no longer an appropriate choice in the future.

Attorney-in-fact for Health Care (under a Durable Power of Attorney/Advance Health Care Directive)

Your agent or attorney-in-fact for health care is a person you appoint to make decisions regarding your health care on your behalf should you ever become unable to do so yourself. You should choose someone you trust to act according to your wishes and with your best interests in mind. You should also consider your agent’s ability to make difficult decisions, and comprehend complicated medical information. Your attorney-in-fact will have access to your medical records in order to make these decisions; you should choose someone you trust to keep your information confidential.

It is a good idea to discuss the role with your agent beforehand, both to make sure that they are willing to accept the role, and to help them understand your wishes in the event that difficult decisions have to be made regarding your health care, including your views on life support, heroic life-saving measures, organ donation, and other important health care issues. Your agent is more likely to ensure that your wishes are followed when the time comes if they understand your views and know that you have thought them through.

You should choose one or more alternates, in case the person you nominate first is unable or unwilling to perform the duties of an attorney-in-fact. You can amend your choice anytime, so long as you retain the legal capacity, if your current nominee is no longer an appropriate choice in the future.

Conservator

A conservator may be appointed by the court to care for you if the court decides that you are no longer able to care for yourself. In some cases, nominating agents under a Durable Power of Attorney for Finances and Advanced Health Care Directive may avoid the need for a conservatorship. However, even if you have appointed attorneys-in-fact, you should still nominate a conservator in case a conservatorship is ever necessary. That way you will get to decide who cares for you, instead of the court.

A conservator will manage your affairs and oversee your care. Conservatorships can be cumbersome, expensive, and time consuming; however, sometimes they are necessary in order to protect people who become incapacitated, at risk of being taken advantage of, or injured.

The person you nominate as your conservator should be someone you fully trust to act in your best interests, and someone capable of handling your affairs for you. You can nominate one person to be conservator of both your person and your estate, or you can nominate two separate people, if you feel that the person best suited to manage your financial affairs for you is different than the person best suited to manage your personal care. You should talk to your nominee beforehand, to make sure they understand your wishes and are willing to accept your nomination should the need arise.

You should choose one or more alternates, in case the person you nominate first is unable or unwilling to perform the duties of a conservator. You can amend your choice anytime, so long as you retain the legal capacity, if your current nominee is no longer an appropriate choice in the future. 

Guardian of Minor Children’s Person or Estate

If you have minor children, you should nominate a guardian to care for them in case you are ever unable to do so. You can choose one person to both care for your child and their estate, if you plan to leave assets to the child, or different people to care for your child (guardian of the person) and manage their estate (guardian of the estate).

The guardian of the person should be someone you trust to raise your child with the child’s best interests at heart. You should consider where the potential guardian lives and would raise your child; whether you are comfortable with your child’s exposure to the guardian’s belief system; where your child would go to school; and who else would be living with your child.

The guardian of the estate should be someone you not only trust to have your child’s best interests in mind, but someone capable of handling money and assets and doing what they can to meet your child’s financial needs.

You should choose one or more alternates, in case the person you nominate first is unable or unwilling to perform the duties of a guardian. You can amend your choice anytime, so long as you retain the legal capacity, if your current nominee is no longer an appropriate choice in the future. If you can, this is one role where it may simplify things if you can agree on your choices with the children’s other parent, since in most situations a guardian will not be appointed unless both parents are unable to care for them.

Trustee

Many people choose to be their own trustee while they are still able and willing to do so. You should also choose at least one successor trustee, to take over when you are no longer willing or able to act as trustee, due to illness, incapacity, or death. You can revoke or modify your living trust at any time while you remain legally competent, including your nominee for trustee. The terms become irrevocable when you die.

You can name a friend or family member, a professional fiduciary, or an institution, such as a bank, to act as trustee. Whomever you name, they should be trustworthy and good with money. You need to be confident that they will act in the best interests of the trust beneficiaries, and in compliance with the terms of the trust and in compliance with the law. They should be capable of working well with the beneficiaries, attorneys, financial advisors, and possibly the court. They should be capable of managing finances and the complexities of your assets and investments.

You should also make sure that the potential trustee charges fees (f any) that are affordable for your trust, and make sense considering the size of the trust principal. Although you may expect a family member to serve without compensation, acting as trustee will expose them to liability and will likely require a significant amount of time; thus it may be appropriate for them to charge a fee.

If you choose a professional fiduciary or a bank, you should discuss your trust with them beforehand to make sure that they accept trusts of the applicable size, and are willing to act as trustee for you. Find out what their fees include; some corporate or professional trustees include professional investment services in their fee, which might make their services more valuable to you. You should also meet with them to make sure that you find them easy to work with and trust them to do a good job.

If you are considering appointing a friend or family member as trustee, you should talk with them beforehand to make sure that they are willing and able to accept the appointment. If you have any concerns about their ability to handle your assets or deal with the beneficiaries, talk to them about it before appointing them. Trustees fill an important role, and you want to be sure that the person or institution you choose is right for the job.