By Contributing Legal Editor Robin Gorenberg, Esq.
When you are having your estate planning documents prepared, one of the decisions to be made is who to name for certain positions in each document.
Here are the most common positions:
Executor of the Will (now called Personal Representative – “PR”): Your PR is named in your Will and is in charge of gathering information about your assets and values at your death, and ultimately assists in winding down your affairs and passing your assets to your beneficiaries. Usually the PR simply works with an attorney to get the paperwork completed to probate the estate. The PR normally comes into play only if your Will is probated, which only happens if you have assets in your name individually (not owned jointly or naming a beneficiary). The PR should be organized, and would need to collect and gather information as to assets, valuations, and to sign off on probate paperwork and tax returns.
You can name a family member, or friend, or if you prefer an “outsider” you can name a professional such as a Bank or Trust company or attorney; although if you name a family member, they can hire financial advisors, CPAs, attorneys.
Here are some of the PR’s duties:
- Dealing with attorneys and the court system to probate the Will and transfer assets (only if probate is required).
- Finding and marshaling all of the assets. This requires going through all of the decedent’s personal belongings, records and documents, as well as dealing with various institutions such as banks, brokerage houses, insurance companies and the decedent’s employer.
- Determining the value of the assets, which may involve dealing with various appraisal concerns.
- Safeguarding those assets, such as guarding and boarding up a home until it can be disposed of.
- Dealing with all of the decedent’s creditors. These range from the hospital where the decedent was treated to the funeral home to the more mundane utility bill.
- Continuing business ventures while the estate process is proceeding, or managing rental property and landlord-tenant affairs.
- Winding up the decedent’s last affairs, such as turning off utility service, selling the home, and closing out credit cards and various accounts.
- Dealing with accountants and the tax authorities to file tax returns and clear any tax situations such as income and estate taxes.
- In unusual complicated situations, having to locate lost heirs (the PR can hire an heir-finding service)
Guardian for Minor Children (in your Will): You will need to decide on who to name to care for and raise your minor children (under age 18) after your death until they turn 18 years old. You should also name an alternate, if possible. You can name more than one person to act together (for example, a married couple), but you should think carefully as to whether you are really naming just one of them as guardian (i.e. if you are naming your sister and brother-in-law, if your sister is deceased, are you really naming your brother-in-law or are you then naming the next person or couple in line?).
The Guardian would also be in charge of the assets passing to your children after your death, until age 18, unless you have a separate Trust, in which case the Trustee of the Trust (who may or may not be the same person as the Guardian) would be in charge of the children’s money (and the Trust could also allow the money to be held past age 18, with the trustee having discretion to use or distribute for the children’s needs before then). If there is a separate Trust/Trustee, then the Guardian is only in charge of raising the children until age 18 and is not in charge of the money.
Power of Attorney (called “Attorney-In-Fact”): The attorney-in-fact is the person you name as agent in your Durable Power of Attorney to make legal and financial decisions for you and to sign your name to documents if you cannot make them yourself during your lifetime, having access to bank and investment accounts, etc. If you are married, you will likely name each other as first choice, but you should name an alternate if both of you are incapacitated. This power can be “immediate” (effective upon signing, to be used for incapacity and/or convenience) or “springing” (not effective unless you are proven to be incapacitated by a letter from your physician). It is best to name one person at a time in this document.
Health Care Agent (agent named in Health Care Proxy): A Health Care Agent is the person you name in your Health Care Proxy to make your medical decisions for you at any time when you are unable to make or communicate them yourself. This can be a life or death situation, OR even if you are having minor surgery and are under anesthesia and can’t make decisions that might need to be made. If you are married, you will likely name each other as first choice, but you should name an alternate as well. It is not uncommon for a married couple to each name a different alternate person for this purpose. You should only name one person at a time in this document.
Trustee: If you are setting up one or more Trusts (i.e. for later ages of distribution to children, avoidance of probate, reducing estate taxes), each Trust would have a Trustee and at least one successor Trustee. Normally you are your own Trustee while you’re alive (unless it’s an Irrevocable Trust), allowing you to maintain full control during your lifetime. The successor Trustee would be in charge of handling the trust during your lifetime if you become incapacitated, as well as after your death.
Depending on what type of trust(s) you have and their provisions, this could include: having discretion over distributions to children or other beneficiaries prior to the ages set for outright (mandatory) distribution in the Trust, as well as to distribute money to the beneficiaries when it’s required (i.e. mandatory ages); managing the Trust – investing the money (the Trustee can hire investment and financial advisors as well as CPA’s and attorneys), filing tax returns; preparing accountings annually to provide to the beneficiaries if the Trust continues past your death. The Trustee can be a family member or a friend, or a professional trustee (bank, trust company, attorney). You can name more than one Trustee at a time, as well as alternates.
Massachusetts-based Contributing Legal Editor Robin Gorenberg, Esq. is an award-winning attorney who specializes in estate planning, probate and estate tax preparation for individuals and law firms. She works with clients on both basic and complex estate plans, from Wills to all types of Trusts. Her goal is to communicate in a way that clients can easily understand, and to make them feel comfortable with the process and the ultimate documents.