Most clients aren’t familiar with the terms professionals use in discussing who administers their estate and affairs and what those responsibilities are. By providing information on the responsibilities associated with these terms, you can help the client make the best decisions possible.
Beneficiary: The beneficiary receives something of value from the estate. For that reason, choosing the beneficiary to administer the estate or trust may present a conflict of interest. Typically, this conflict of interest is not of primary concern. If you wish to put a check on the beneficiary/trustee/executor, you may wish to add someone to serve as co-trustee or co-executor.
Trustee: A trustee can be either an individual or a corporation who manages property or assets held in trust. Trustees must make decisions regarding investments and distributions, while fulfilling the terms of the trust. When choosing a trustee, it’s important to choose someone who is able to follow instructions. They should be willing to seek help and able to choose those who have the legal or financial expertise which they may not have.
Property Power of Attorney: Under this document, the “principal” can delegate to another person, called an “agent” or “attorney-in-fact,” the power to make decisions regarding assets, real estate, and other property titled in their own name, rather than the trust.
Healthcare Power of Attorney: Your “healthcare agent” will be making medical decisions for you when you are no longer able to do so. Choose someone you can talk openly and honestly with about your wishes beforehand and, most importantly, whom you trust to honor those wishes when the time comes.
Guardian: A guardian makes decisions on behalf of an individual who is “legally incapacitated.” Someone who is not of legal age is a “minor” and is an example of someone who is legally incapacitated. While you can express whom you would like to act as guardian for a minor child, the ultimate decision lies in the hands of the court. The judge will make the determination guided by what is in the best interests of the child. Certainly, the judge will give your suggestion substantial weight.
With a little basic knowledge, clients are able to make informed decisions about who is best-suited to fill the various roles in their plan.
Stephen C. Hartnett, J.D., LL.M.
Associate Director of Education
American Academy of Estate Planning Attorneys, Inc.
9444 Balboa Avenue, Suite 300
San Diego, California 92123
Phone: (800) 846-1555
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