One of the most important things in preparing your estate plan is naming the appropriate person to act as your Personal Representative (or Executor). Some people feel there is a “right” person to name, by virtue of relationship, birth order, or proximity – these reasons can lead to disastrous results if the wrong person is selected.
A complete estate plan can require several different appointments – personal representative (executor), attorney-in-fact, trustee, health care agent.
These positions are very important and can be complex. A Personal Representative (or Executor) is appointed in a will to handle the closing the estate. Tasks include collecting and inventorying property of the estate, maintaining an estate checkbook to pay final bills, filing probate forms and handling the probate process, preparing final tax returns, and distributing the property in accordance to the will.
An attorney-in-fact is an agent named in a Power of Attorney (POA), this person can act on your behalf as provided in the POA, handling financial or other matters while you are still alive.
A trustee is the person in charge of handling the financial matters of a trust – paying valid bills, making distributions, investing where appropriate, completing required forms.
A health care agent is the person named in a Health Care Directive (also known as a medical power of attorney or living will). The health care agent has the power to make all medical decisions for you should you not be able to speak for yourself. These positions are more than honorary titles, they require hard-work and the ability to handle the tasks involved.
For your estate plan to work smoothly, you must appoint people who are right for the job. Look for someone with the following characteristics:
Willing to accept the position
Do not surprise someone with the appointment, he/she does not have to accept the job, so your estate will run smoother if you select a person willing to take on the task.
Responsible & Trustworthy
The person you name should be someone you would trust your life and your money to (because that’s what you are doing). To prevent family harmony, and avoid future disputes, this person should also be trusted by other family members.
A Personal Representative or Trustee is in charge of a lot of paperwork and financial tracking. The job will be much easier if he/she is a naturally organized person who keeps meticulous records for his/her own finances.
Some of these positions could last for years. Some tasks will require hard work and a lot of follow up. Make sure you name someone who will remain focused and get the job done.
Capable of handling the task
Some people just would not be up for the job, sometimes the emotions of the situation may prevent a person from getting the job done. If your daughter is an emotional person anyways, she just may not feel up to the task of handling her parents’ estate.
Able to make a decision
To some people, making a decision is difficult, if not impossible. These people may be paralyzed by the burden of making certain decisions. Do not name your son as your Health Care Agent if he will be unable to make the decisions you would want (such as when to remove life support) when that time comes.
Willing to seek and accept help
Sometimes the position of Personal Representative or Trustee can be overwhelming. You do not want to burden your loved ones. Your nominated person should be willing to seek professional help from a lawyer or financial adviser, or accept offers of help from family, should the task get complicated.