How Do You Nominate Fiduciaries?
A large part of making an estate plan is deciding who will be beneficiaries of your estate when you die. Estate planning may also include taking steps to minimize estate tax, preparing for the transfer of the family cabin to future generations, and deciding who gets your ukulele. Some people might say that is the fun part of estate planning. The less glamorous (but no less important) part of estate planning is deciding who you want to carry out that magnificent estate plan that you have set in place.
Selecting the right person or organization, in the case of a professional fiduciary, to fill the fiduciary roles in your estate planning documents can make a significant difference in how your estate is administered. This blog post discusses common fiduciary roles that you will need to nominate people to fill in your estate planning documents.
Personal representative: This is the person in charge of administering your estate after you die, sometimes referred to as your executor. This person will work with an attorney to open a probate, be responsible for making an inventory of your estate assets, paying your creditors with those assets, and distributing your assets as directed under your Will. Your personal representative is also responsible for filing your income taxes after you die and, if you have a taxable estate, filing the estate tax return.
Trustee (Revocable Trust). If you have a revocable living trust as your primary estate planning document, and a probate of your estate is not necessary, your trustee will be responsible for the same tasks as the personal representative would be in a probate estate. This means that the trustee is responsible for gathering your assets in your trust, paying your debts, and then distributing the remaining assets as you direct in your trust. If a probate is not needed, your trustee will be responsible for filing any necessary income or estate tax returns.
Trustee (Testamentary Trust). The trustee of a testamentary trust is the person in charge of administering any trust that is created under the terms of your Will. A testamentary trust is a type of trust created under your Will that comes into existence as an entity when your estate is ready to distribute assets to it. Your will sets out who will receive distributions from the trust (the beneficiaries) and who is in charge of managing the trust assets and making the distributions (the trustee).
Attorney-in-Fact (finances). This is the person who you nominate in your Durable Financial Power of Attorney to handle your financial and legal affairs while you are still alive. Your attorney-in-fact can manage your financial accounts, pay your bills, buy or sell property on your behalf, make gifts, and handle your legal affairs.
Agent for Health Care Decisions. This is the person you nominate to act as your agent in your Durable Power of Attorney for Health Care Decisions. Your agent is the person who will make your health care decisions if you are not able to communicate with your doctors, either due to lack of consciousness or incapacity. Your agent will have access to your medical records, communicate with your doctors, and communicate with your medical insurance provider.
Agent for Disposition of Remains. This is the person who is responsible for directing the disposition of your remains. Your agent will carry out your wishes to be buried, cremated, or composted. Your agent is also responsible for carrying out your wishes regarding any memorial.
Nominating the right people to fill the above roles in your estate planning documents is incredibly important. In addition, it is important to nominate at least one alternate to fill each role in case the person you selected is unable to act in that capacity at the time.
Do you have questions about estate planning? We’d love to hear from you. Please contact Beresford Booth at info@beresfordlaw.com or by phone at (425) 776-4100.