Lots of folks get into Fantasy Football where they get to build their own team of players based upon each player’s unique skill-set and experience. It can be hours of fun for those who like this sort of thing.
Whenever a person or a couple are considering their estate-planning, they need to consider building their own dream team here as well. Why? Because you are asking (and expecting) one or more individuals to step in and help you accomplish some goal once you are no longer able to do so yourself. You may have been named to act as someone’s Executor or Agent under their Power of Attorney. If you were, you already understand the responsibility this person faces.
When you are thinking about your own estate-planning, you are choosing one or more people to fill the following roles:
Executor or Personal Representative
Agent under the Power of Attorney
Proxy under all healthcare documents
Guardian of your minor children
Conservator or Trustee of the children’s inheritance
The most important role to fill is Guardian of the minor children. This person is the surrogate parent, so you want to choose someone who most closely models your values and parenting style if possible. They will raise your children until college age at the very least, so be mindful of how old the Guardian will be too. Also, depending on the number of their own children at home, you don’t want to make their home, car, vacations too complex. By that I mean that, if they already have three children, adding your three means they now have to buy a Suburban rather than a smaller SUV. They might need to do a room addition to their home or move. That trip to Disney will cost a good bit more too. You can compensate the Guardians for this, and you can also provide that the children’s expenses be paid out of the estate, but it still never hurts to have a conversation with the people you want to serve as Guardian too, just in case there is a problem.
If you choose a couple as co-Guardians, also decide which of the two would be sole guardian if the couple got divorced. It happens.
School districts become increasingly important as a child gets older too, so take that into consideration as well.
The next role to fill is that of Trustee or Conservator. This is the person who actually manages the children’s inheritance until they are old enough to receive it in a mature manner. If you don’t name a Trustee, the children will get their inheritance at age 18, which in our opinion is not nearly old enough. Until they reach whatever magic age you choose though, the Trustee’s job is to pay out of this fund for each child’s needs for health, education, maintenance and support. So tuition, books, transportation, dental work, etc can be taken care of by this person from the inheritance fund. You can even incentivize the children by paying a small bonus to each of them for honor roll etc, should you choose.
Obviously, this person needs to be trustworthy and ideally good with money as well as someone who has at least a passing interest in your children. Depending on the children’s ages now and the age at which final distribution might take place, this person might be involved in the role for decades, so choose someone young enough to still be around down the road. You can always select a successor too, especially if you wanted one of your own parents to serve as long as they were able, then a brother or sister after that.
The next most important role to fill is Agent under your Power of Attorney. This is the person who will take over your own financial affairs while you are alive but unable to do so any longer. If you were a patient in a mental institution or a nursing-home, this person takes over all of your financial affairs. Since they would have access to your banking, investment and real estate holdings, they can rob you blind, so choose wisely. Many people rely on Agents for years though, without any problems arising, and the Agent is ultimately responsible for how they handle your affairs and can go to jail if their behavior rises to a certain level. That doesn’t get your money back though! Since this person’s skill-set is similar to that of the Trustee above, and since there would not be any overlap, you could choose the same person for both roles.
The next role to fill is the Executor. This person’s job begins only IF your estate has to go through the formal probate process. Usually, when the first spouse dies, the surviving spouse doesn’t have to go through the probate process. So probate may only be needed if you die unmarried.
This person’s job is to follow your Will to the letter and handle all of the legal requirements during probate, which lasts about a year or so. This person ultimately distributes your assets to the people you have named in the will. He or she is responsible too for all of the details of your estate- changing the locks on the house, keeping it insured, cashing in stocks, bonds and mutual funds, dealing with any and all creditors you might leave behind. They can get paid though, from estate funds, so it is not a thankless job. The fee is usually no more than 4% of the value of the estate, though many people accept much less than this.
The last role to fill is called a Proxy for Healthcare. This person will be the one making all medical decisions for you when you can’t speak for yourself, either temporarily or permanently. Choosing this person can be difficult. You want someone who is available first, because visiting with someone in the hospital is time-consuming. Second, you want someone who is bossy. Nurses don’t always respond when we want them to, so you want someone who will be assertive with your healthcare providers when you are in pain. Third, you want someone who will follow whatever guidelines you have established in terms of end-of-life care. If you say you don’t want life-sustaining procedures, you don’t want to appoint a Proxy who is too soft-hearted to follow your instructions.
In summary, be thinking about who you want for each of these roles. It can be the same person for all, or a different person for each. I am hopeful though, that this short explanation of each one’s job responsibilities will help you choose the perfect person for each role.
William G. Nolan
Elder Law Attorney
Nolan Elder Law LLC