The People in Your Estate Plan – or Who Does What??

When you are making an estate plan, the vocabulary can be confusing -- what IS a power of attorney, and who should that be?  When I name my son as healthcare proxy, what should I tell him?  Below are some basic definitions of the roles in the estate plan and a general sense of who does what.

Executor or Personal Representative

This is the person responsible for administering the WILL.  This person will be appointed by the probate court to act as the representative of the estate.  He/she will be responsible for the court filing (usually with the help of a probate attorney), gathering all the assets, paying bills and expenses, and then making distributions according to the terms of the will.

What you should look for when naming a PR/Executor:  Someone who is detail oriented, good with administrative tasks, and will be able to navigate the court and family issues that might arise.

Attorney in Fact (or Power of Attorney)

This person can make financial and legal decisions and arrangements for you during your lifetime.  You could ask this person to deal with a real estate closing, or if you are in the hospital, this person can pay your bills and take care of other kinds of legal/financial tasks.

What you need:  This is a person who is organized, detail oriented, and someone you trust entirely with access to your finances.

Healthcare Proxy

This is the person who can make medical decisions for you if you cannot make them yourself.  Activating the healthcare proxy is a medical decision – if your doctor thinks you cannot make medical decisions, your healthcare proxy is “activated” and your agent steps in.

What you need:  A person who understands your medical wishes and will follow those wishes regardless of his or her personal feelings.  This person also needs to be calm when things can be chaotic and be able to say clearly to medical personnel what kind of care or treatment you would want in this situation.

Trustee

If you have a trust, the person managing the trust is called the trustee.  The people who receive assets from the trust are the beneficiaries.  In a traditional revocable trust, the person creating the trust is both the trustee and the beneficiary.  If the original trustee cannot act (due to disability, death, or resignation), the successor trustee steps in to be the manager of the trust.  This person has a fiduciary duty to follow the terms of the trust, act in the best interest of the trustee, keep good records, etc.

Best person for trustee: This is a person who is organized, detail oriented, and someone you trust to carry out  your wishes.