How to Pick a Trustee, Personal Representative, and Agent in your Power of Attorney

While the term “Fiduciary” is a legal term with a long history, it very generally means someone who is legally obligated to act in another person’s best interests. Trustees, Personal Representatives, and Agents appointed in a Medical or Financial Power of Attorney are all examples of Fiduciaries. When you pick Trustees, Personal Representatives, and Agents in your Estate Plan, you’re picking one or more people to make decisions in your and your beneficiaries’ best interests and in accordance with the instructions you leave. Luckily, understanding the basics of what each of these terms means and what to consider when making your choices can make your Estate Plan work far better.

When considering who to appoint to these positions, important factors include:

• Geographical Proximity – are they close enough to help, or will they be willing to travel?
• Willingness – will they be willing to perform their duties?
• Capacity – do they have the skills and attributes necessary to do a difficult job?
• Trust – can you trust the person to be 100% honest and willing to see the job through to its end?

Trustee

A Revocable Living Trust is often the center of a well-designed Estate Plan because it is simply the best strategy for achieving most individuals’ goals. In a Revocable Living Trust, your successor Trustee will be responsible for making sure your wealth is passed on and managed in accordance with your wishes after your death or incapacity. Like each of the following individuals involved in your Estate Planning, it’s best to have a trusted person or financial institution carry out this vitally important role.

It’s important to make the language in your trusts as clear as possible so that your Trustee knows exactly how to handle various situations that can arise is asset distribution. Lastly, your Trustee will only control the assets contained within the trust — not the rest of your estate, another reason that completely funding your living trust is incredibly important.

Powers of Attorney

Your Power of Attorney is the document in your Estate Plan that appoints individuals to make decisions on your behalf if you become unable to do so yourself. There are a few different types of Powers of Attorney, each with their own specific provisions. There is quite a wide range of situations covered by various Powers of Attorney, and we can help you decide which types you’ll need based on your current situation and future goals. Here are two common types to cover in your Estate Plan:

Financial Powers of Attorney

Financial Powers of Attorney grant individuals the ability to take financial actions on your behalf such as purchasing life insurance or withdrawing money from your accounts to cover your costs. In most cases, Powers of Attorney are granted to individuals appointed as Agents. However, especially regarding financial decisions, an institution like a trust company can also be named.

Health Care Powers of Attorney

Healthcare Powers of Attorney also cover a wide range of specific actions that can be taken regarding an individual’s medical needs such as making decisions about the types of care you receive. For example, a healthcare Power of Attorney can be the doctor you most trust to gauge your mental competency.

Your Health Care Power of Attorney can communicate some of your preferences and important information, such as:

• Autopsy
• Organ & Tissue Donation
• Cremation vs. Burial
• Things you will not permit your Health Care Proxy to authorize
• Provide vital Health information such as life-threatening allergies or the use of a pacemaker

Mental Health Care Power of Attorney:  This document may be included within your general Medical Power of Attorney, but in Arizona, it is often a separate document.  Arizona requires a separate statement acknowledged by you to authorize your Agent to make decisions about Mental Health Treatment if you have a severe psychiatric crisis and are in need of psychiatric hospitalization. Arizona has specifically created a law

Personal Representative (Executor)

Your Personal Representative is the person who will see your assets through Probate (Court Supervised Administration of your Estate) if necessary and carry out your wishes based on your last will and testament.  They are typically the same person or institution as your Trustee.

Some individuals chose to go with a paid Personal Representative. This is someone who doesn’t stand to gain anything from your will, other than collect administrative fees, and may be a good choice if your estate is large and will be divided among many beneficiaries. Of course, family or friends can also serve, but it’s important to consider the amount of work involved before placing this burden on your family or friends.

Being an Personal Representative can be hard work and may have court-ordered deadlines, so it’s crucial to pick someone you know will be up for the job. They may need to hire a CPA to help sort out your taxes or a lawyer to assist in the process or to aid in dispute resolution. Therefore, choosing a spouse or someone else intimately involved in your life may not always be the wisest option, as they may not be up to the task at the time.

Get in touch with us today

Let us help you make the process of picking your Trustee, Powers of Attorney, and Personal Representative as smooth and headache-free as possible. Not only will we help you make a First choice, but also a Second Choice, and perhaps a 3^rd Choice.  It is important to have a backup in case your first choice is unable or unwilling to serve.  Once you have these choices in place, you’ll be able to rest easy knowing that your Estate Plan is in good hands no matter what life brings. Give us a call to make an appointment today to help you.

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