One of our many services at NC Planning includes Estate and Trust Administration. We frequently receive questions from clients that have been named as an agent in a loved one’s estate plan that are concerned with their responsibilities to properly handle their loved one’s affairs. At NC Planning, we are here to assist and guide clients through the Estate Administration process in order to provide clarity and support during this time of mourning. It’s important to understand the common agent roles provided in an estate plan and the responsibilities that are assigned to each.
Let’s examine the common agents that serve under an estate plan and what they all do:
- EXECUTOR/EXECUTRIX– The individual that is named under your Last Will and Testament and is responsible for the administration of the probate estate. Essentially, this individual carries out the last wishes by being appointed by the Clerk of Court, gathering information on the deceased’s assets, completing inventories and accountings, paying off creditors, and distributing assets according to the wishes set forth under the Will. This role should not be taken lightly as an Executor is a fiduciary role and he or she could be subject to personal liability if the obligations of the Executor are neglected.
- Good qualities to have: We advise that this individual be organized as he or she will have to keep track of receipts for accountings. The Executor does not have to be a legal expert or a financial guru because they can find counsel or advisors that are eager to help. When deciding on an Executor, simply pick someone you trust to carry out your final wishes. However, if this individual is located in another state, then they will need to associate with a resident process agent, a function NC Planning regularly assists clients with that have been named Executor of their loved one’s estate.
- TRUSTEE– This is a similar role to that of the Executor but this is the individual that would be managing a trust if a loved one lists a trust as part of their estate plan. While the probate administration typically takes several months, a Trustee may serve under a trust administration for many years depending upon the wishes set forth in the trust. The Trustee uses their discretion to allocate a trusts’ distributions to the appropriate beneficiaries.
- Good qualities to have: If you have put a trust in place to protect a loved one from spending too much too quickly, your Trustee should be someone that can be assertive in following the terms of your trust and can firmly manage your beneficiaries. Similarly to an Executor, organization is key to the role of a Trustee. This individual should align with your spending habits and should be able to properly manage the assets you leave to your beneficiary according to your terms.
- FINANCIAL POWER OF ATTORNEY– The Financial Power of Attorney will assist you with the management of your financial affairs during your lifetime. Depending upon the structure of your Financial Power of Attorney document, this individual may be able to assist you immediately or only upon your inability to manage your financial affairs. While this is a fiduciary role, this is a very wide grant of power to your agent, which simply enables him or her to step into your shoes and manage your financial affairs if you are unable to do so yourself.
- Good qualities to have: It is very important to pick someone who is trustworthy and responsible that will use your assets in your best interest. Your Financial Power of Attorney will not only have the discretion of how to care for you financially but will also have to pay your bills on time.
- HEALTHCARE POWER OF ATTORNEY– Your Health Care Power of Attorney will make health care decisions on your behalf if you are unable to do so. This authorization is also fairly wide grant of power to care for your physical needs. This individual will decide what procedures and treatment are appropriate as well as whether you should be admitted to an assisted living facility or stay at home.
- Good qualities to have: This individual should be responsible and a good communicator. There will most likely be many individuals that want to ensure you are being taken care of. Although the Health Care Power of Attorney is not required to discuss decisions with other loved ones, communications with loved ones can help avoid further heartache and family feuds. Additionally, we advise that your Health Care Power of Attorney is local because a health care agent needs to act quickly.
- GUARDIAN– A Guardian is responsible for a minor child OR an adult that is unable to care for themselves. The “Guardian of the Estate” is similar to the Financial Power of Attorney in that it cares for the financials of an individual. Additionally, a “Guardian of the Person” is similar to the Health Care Power of Attorney in that it cares for the health and well being of the individual. The term “General Guardian” encompasses a role that serves as a Financial Power of Attorney and a Health Care Power of Attorney unanimously.
- Good qualities to have: The Guardian should be an organized individual that is capable of caring for an adult that is unable to care for themselves or a minor. When choosing a Guardian, it is essential to choose a trustworthy and compassionate individual that you are confident can take on the important responsibility of caring for another individual.