When people think about estate planning, they typically think of who will get their possessions. Upon further thought, they recognize that the most important decisions they make will be the identity of trusted decision makers like guardians, executors, trustees, and agents.
If the individual has a Will, an executor or personal representative is named in the Will to manage the affairs of the estate. This person has the responsibility of collecting all the assets of the person who has died, managing those assets, paying debts of the estate, and then distributing the assets to heirs or other beneficiaries.
A trustee is similar to an executor, except the trustee manages the assets of the trust rather than of the estate. Because trusts often remain in existence for many years, the role of trustee may be more important than that of executor.
An agent is the person you appoint under a power of attorney to make decisions for you in the event that you are not able to do so for yourself. The agent under a power of attorney for property will make decisions regarding the management of your financial affairs. The agent under a health care power of attorney (also known as an advance health care directive or health care proxy) will make decisions regarding your health care.
If you do not have a power of attorney, it may be necessary to appoint a guardian or conservator to make financial and health care decisions for you if you are not able to make them for yourself. In some states, a separate guardian or conservator may be appointed for the care of the individual and a different person appointed as the guardian or conservator of the property, or estate, of the individual during lifetime. You may appoint a guardian or conservator for your care in a power of attorney.
Guardians of minor children are “nominated” in the Will by the last parent to die. Guardians are “nominated” rather than appointed because the courts will give preference to the nomination but are not bound by it. If a court determines that the best interests of the child would be served by another choice, they need not heed your suggestion.
An example of this is the tragic case of Stephen and Sara Sherwood. Only nine days after his return from Iraq, Stephen shot his wife and then himself. This left his daughter an orphan. The authorities in Colorado placed the daughter in the temporary care of Sara’s sister, Ginny, and her husband, who then sought to be appointed as guardians. Stephen’s mother objected and sought appointment herself. The trial court looked to Stephen’s Will, because he was the last parent to die. Stephen’s will nominated his mother and the trial court considered itself constrained by that unless to do otherwise would have caused actual harm or danger. The Colorado Supreme Court reversed that decision and instructed the trial court to determine which choice would be in the best interests of the child. Many states also allow a child over a certain age, typically around age 13 or 14, to overrule the nomination of guardian in the Will.
While the nomination of a guardian is not a guarantee, it does allow you to give the court guidance, which it will use to make its determination. If all other things are equal, the court will heed your advice.
The nomination or appointment of trusted individuals to be guardians, trustees, or executors is the most important decision you can make with regard to your estate plan. These individuals are charged with carrying out your wishes, whether in raising your children, managing your assets, or making distributions. A qualified estate planning attorney can assist you in making these difficult choices and drafting documents to accomplish your goals.
Compliments of the McGee Law Firm, Attorney Brandon McGee
Written By: The American Academy of Estate Planning Attorneys