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Planning for the future is essential, especially when it comes to estate planning and making sure your wishes are carried out by someone you trust.

One of the most important decisions you’ll make in the process is choosing a trustee, executor, and agent under a power of attorney.

This article will guide you through selecting the right individuals for these roles and help ensure your estate is handled according to your wishes.

Understanding the Different Roles

Trusts, durable power of attorneys, and Wills are three estate planning documents foundational to your family’s long-term personal and financial health.

Once you die or become incapacitated, the provisions in these documents go into effect, and your appointed personal representative will be responsible for carrying them out. Therefore choosing a responsible person—whether that’s a family member, a professional fiduciary, or a financial professional—is key to ensuring your estate is left in good hands.

Here’s an overview of their roles in your estate administration.

Executor

Your executor is the person who will handle your assets after you pass away. They’ll ensure that everything is divided up the way you wanted in your Last Will & Testament. The executor might also be your trustee if that’s what you want. Sometimes, people call this person the personal representative.

Some families hire a paid executor if their estate is big and has many beneficiaries. Friends or family members can also be executors, but ensuring they’re up to the job is important. Being an executor can be tough, and they may need to hire a CPA or lawyer to help.

So, it’s not always the best idea to pick someone very close to you, like a spouse, because they might be unable to handle the work.

Some of the key responsibilities of an executor include:

  • Identifying and gathering the deceased’s assets
  • Paying outstanding debts and taxes
  • Filing necessary tax returns and probate court documents
  • Distributing assets to the beneficiaries as specified in the will
  • Managing the estate’s finances and maintaining proper records
  • Closing the estate once all tasks have been completed

Trustee

A well-designed estate plan often centers around a revocable living trust because it is the best strategy for achieving most goals (asset protection, probate avoidance, etc.). In a revocable living trust, a trusted person or financial institution should act as your successor trustee, responsible for ensuring that your wealth is passed on and managed in accordance with your wishes after your death or incapacity.

It’s crucial 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 in asset distribution. Additionally, your trustee will only control the trust’s assets, not the rest of your estate. Therefore, it is vital to completely fund your living trust.

Some of their duties may include:

  • Investing and managing trust assets
  • Keeping accurate records and providing regular accountings to beneficiaries
  • Making distributions to beneficiaries as outlined in the trust document
  • Communicating with beneficiaries about trust matters
  • Working with legal, financial, and tax advisors to ensure compliance with applicable laws
  • Administering the trust

Durable Powers of Attorney

In your estate plan, the power of attorney appoints individuals to make decisions on your behalf if you’re unable to do so yourself. Various types of powers of attorney exist, each with unique provisions that cover a wide range of situations.

Our team can assist you in determining the types you’ll require based on your current situation and future goals. To ensure comprehensive coverage in your estate plan, here are two common types of powers of attorney to consider.

Financial Powers of Attorney

A financial power of attorney allows someone else to make financial decisions for you, like purchasing life insurance or taking money from your bank account to pay for things you need. Usually, you choose a person to be your decision-maker, but you can also choose a company to do it for you. This company is called a trusted company.

Healthcare Powers of Attorney

A healthcare power of attorney, or medical power of attorney, allows someone to make decisions for you about your medical care. It covers many specific actions, like choosing the type of care you receive. For example, you can name a doctor you trust to decide if you’re mentally able to make decisions about your health.

A durable power of attorney is particularly important for estate planning, as it allows the agent to continue making decisions on behalf of the principal, even if they become incapacitated due to illness or injury. Remember, whether you choose a financial power of attorney, health care power of attorney, or both, you do not have to choose the same person to serve in both roles.

Factors to Consider When Choosing Your Representatives

When choosing your trustee, executor, and agent under a power of attorney, consider the following factors:

  • Trustworthiness — The individuals you select should be trustworthy. You must have confidence that they will act in your best interest and follow your wishes.
  • Financial acumen — Your representatives should have a solid understanding of financial matters, as they will be responsible for managing your assets and making important decisions on your behalf.
  • Organizational skills — Managing an estate or trust requires strong organizational skills, as the trustee, executor, and agent under a power of attorney must keep track of various documents, deadlines, and other details.
  • Communication skills — Good communication skills are essential, as your representatives must work closely with beneficiaries, attorneys, accountants, and other professionals.
  • Emotional stability — Your chosen representatives should have the emotional stability to handle the responsibilities and pressures of their roles, particularly during difficult times such as illness or the death of a loved one.

Seeking Professional Assistance

While family members or close friends may seem like obvious choices for these roles, sometimes it’s best to seek the help of professionals.

A professional estate planning attorney can offer invaluable expertise and objectivity. Don’t leave your estate planning to chance. Secure your future and protect your loved ones by entrusting your estate plan to the experienced professionals at Hermance Law.

Located in Ventura, CA, our dedicated team will help you navigate the complexities of trusts, wills, and powers of attorney, ensuring that your wishes are carried out with precision and care. Take the first step towards peace of mind by contacting Hermance Law today. Call us to schedule your FREE initial consultation.

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