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Estate planning: How to choose your key people

Estate planning: How to choose your key people


Estate planning can often bring a wave of emotions. For some, these emotions get in the way of implementing an estate plan. Thinking through and finalizing the asset flow of your estate plan is an important step in the process, but choosing the people who will play pivotal roles within your plan is equally important.

Even the best formulated estate plan can run into snags if the wrong individuals are appointed  or the plan isn’t reviewed and updated to account for changing circumstances.

  • Take the time to think about who in your inner circle is best suited for the particular role.
  • Don’t let your emotions overwhelm your ability to get your plan in place.
  • Know that your key people will likely change as life progresses and that   your documents can be updated accordingly.

Let’s review a handful of individuals you’ll need to build your estate plan.

Executor or personal representative

An executor or personal representative is the person you appoint in your will who will be  responsible for gathering assets, taking assets through the probate process, and distributing assets according to your will. Executors are also responsible for completing court filings, paying taxes, and taking care of any outstanding debts . You can appoint a friend, family member or professional to act as your executor. If you do not appoint someone, the court will appoint someone for you.

In your executor, you may look for someone who is:

  • Financially literate
  • Trustworthy
  • Responsible
  • Amenable
  • Fair
  • Patient
  • Reliable
  • Organized

Their tasks include the ability to:

  • Adhere to a court schedule
  • Follow probate procedures
  • Complete paperwork
  • File tax returns
  • Manage administration
  • Communicate with beneficiaries
  • Liquidate assets
  • Manage assets
  • Potentially hire professionals

Read more: Estate planning primer: Trusts and estates

Trustee – successor trustee

A trustee is appointed by the trust creator (grantor) and is responsible for administering the trust according to the terms of the trust. Their administrative tasks include filing tax returns, reporting to beneficiaries, communicating with beneficiaries and making both required and discretionary distributions. Trustees have a fiduciary duty to act in the best interest of beneficiaries and can be held liable if this duty is breached. You can appoint a friend, family member, professional or institution as your trustee.

In your trustee, you may look for someone who is:

  • Trustworthy
  • Financially responsible
  • Responsive
  • Has the time to dedicate
  • Understands the responsibility
  • Good communicator
  • Impartial

Their tasks include that they:

  • Uphold all fiduciary duties
  • Protect/manage assets
  • Administer the trust according to its terms
  • Manage beneficiary requests
  • Keep records/accountings
  • File tax returns
  • Communicate with beneficiaries

Read more: How to set up a trust fund

Guardian for minor children

If you have minor children, it is recommended that you appoint a guardian who would step in to care for your children in the event both parents passed away while the children are under age 18. For this role, you may want to consider nominating a friend or family member who would raise them in a manner that reflects your values. It is very important to discuss the nomination with your potential guardians before finalizing your decision, since it is a major commitment. This selection can be one of the most emotion-filled so take the time to think about who would be the best fit for your family.

In your children’s guardian, considerations include:

  • Similar values
  • Location
  • Lifestyle
  • Willingness
  • Appropriate age
  • Character
  • Resilience
  • Stable
  • Financially responsible

Their tasks include:

  • Childcare
  • Emotional support
  • Discipline
  • Guidance
  • Organizing food, housing, education, medical care
  • Role model
  • Safety
  • Love

Health care agent

Your health care agent is the person you nominate to make health care decisions on your behalf if you are ever unable to make these decisions for yourself. This selection is made in a health care or medical power of attorney document. You want to designate someone who will follow your wishes and make decisions in the way that you would (even if they have an emotional conflict about the decision). The health care power of attorney document can provide additional guidance for your agent.

Traits to look for include:

  • Someone who lives in close proximity
  • Calm
  • Collected
  • Respectful
  • Stoic
  • Empathetic
  • Able to make hard decisions

Their tasks include:

  • Conferring with medical staff
  • Communicating with family
  • Making decisions

Read more: Health insurance options for early retirees

Financial agent

Your financial agent is the individual who you nominate in your financial power of attorney to step in and make your financial decisions if you are ever incapacitated. This person will be responsible for managing your financial affairs , but you can limit their power within the document if you choose. You can also decide whether you want the document to become effective upon signing or only after a doctor/doctors confirm that you are unable to make the decisions yourself.

Traits to look for include:

  • Trustworthiness
  • Financial acumen
  • Organization

Their tasks include:

  • Paying bills
  • Completing transactions
  • Continuing business operations
  • Paying/filing taxes
  • Selling assets
  • Purchasing insurance
  • Collecting retirement benefits

The bottom line

Take the time to think through who best fits the needs of your estate plan.

For the executor and trustee roles, consider a professional if you think the objective, less emotional third party would best fit your situation. Know that these selections will most likely change as time goes on, and that’s okay.

Lastly, make sure you name at least one backup to each role. Finalizing your estate plan (and choosing your key people) will allow you to live life knowing your plan will flow according to your intentions and your loved ones will be better situated.

Adam Tarsitano

Senior Estate Planning Specialist

Adam Tarsitano is a Senior Estate Planning Specialist at Empower. He is responsible for analyzing current estate plans, wills, and trusts in order to help clients identify inefficiencies and opportunities.

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