Planning Your Legacy

Key Players of Your Estate Plan

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An important part of the estate planning process is deciding who'll help you manage your responsibilities if you are no longer able to and when you are gone. Here are the key roles that you need to assign.

Health care power of attorney

What this person does

  • Steps in to make health care decisions for you when you cannot make such decisions for yourself
  • Makes decisions ranging from ongoing care or basic medical decisions to emergency decisions in a life or death situation

Questions to consider

  • Does this person understand what I would want done, and will he or she stand by my wishes?
  • Does this person live nearby, or would he or she be able to live nearby if my situation required it?
  • Is this person logical in high-stress times and able to make medical decisions?
  • What experience has this person had making other health care decisions? Will he or she know what questions to ask and how to be my advocate?
  • Is this person close to me and comfortable making a health care decision for me? Do we have compatible opinions about health care treatment?
  • Do I trust this person to carry out my wishes if I'm unable to make decisions for myself?

Durable power of attorney

What this person does

  • Steps in to make financial decisions for you when you cannot make them for yourself
  • Needs to be someone you trust to carry out all types of financial decisions such as paying bills or making deposits

Questions to consider

  • Do I trust this person to manage my finances if I'm unable?
  • Will this person be available to make these decisions? (Consider where this person lives, what he or she does for a living and how many other commitments he or she may already have.)

Executor

What this person does

  • Works with your attorney and other financial advisors to settle your financial affairs after your death. Includes filing taxes, paying bills and making sure all of your property goes where you want it to go.
  • Either does the work or hires professionals to help with taxes and distribute assets and other notices required to be given by the estate. The executor often works closely with the attorney. Unlike other positions, the executor is entitled to payment for his or her time.

Questions to consider

  • Is this person trustworthy, detail-oriented and able to handle paperwork?
  • Does this person have the time to take on the role?
  • Does this person live close to where the estate will be settled and, if not, will that slow the process or create complications?
  • Does this person have good financial sense? Can he or she work with professionals such as tax advisors and attorneys?

Trustee

What this person does

  • Takes charge of the assets placed in a trust

Questions to consider

  • Do I trust this person to make sound decisions about the money I am leaving to a minor or other party?
  • Does this person have compatible financial sense?
  • Will this person deal with my beneficiaries fairly and competently? 

Guardian

What this person does

  • Raises your children if they are still minors when you pass away
  • Carries out your decisions about where your children live, where they go to school and all other matters regarding everyday living

Questions to consider

  • If I were unable to raise my children, would I feel good about this person raising them in my place?
  • Does this person have the living environment I'd want for my children?
  • Is this person willing and financially capable to raise my children?

Beneficiary

What this person does

  • Receives the benefits or assets you leave behind
  • Receives distribution of assets from the executor of the estate, as long as a beneficiary is an adult and there are no restrictions on the distribution
  • Receives distribution of assets from the trustee, if beneficiary is a minor or the distribution has restrictions

Questions to consider

  • Will this person use what I am leaving him or her in a way I feel good about?
  • Do I have any reservations about this person receiving my gift? If the person is underage, has/had a drug or alcohol problem or a history of bad spending, consider options such as different trusts or investments that would pay a smaller specific amount over time.

Here are additional considerations to ponder as you decide who to name for each role:

  • Consider each role separately and anticipate needing more than one person to fill each role. The qualities required to fill one role may not be the same qualities you need to fill another role.
  • Consider naming a backup for each role in case the primary person is unable to serve.

While it's important to carefully consider who you want in each role, don't wait for a "perfect decision." You're nearly always better to name someone now, knowing you can change your mind later. In other words, don't let waiting for "the best there is" keep you from naming "the best you've got."

Once you've decided who will fill each role, be sure to talk to each person so everyone knows you've chosen them and what's expected of them. Learn more about having that conversation.

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