Choosing Your Executor, Trustee, Etc. (Your Fiduciaries)

As part of the estate planning process, you will need to make several choices.  Some of these choices include who will manage your property if you become incapacitated; who will make sure that your personal needs are met if you become unable to care for yourself; who will care for your minor children (if applicable) if you can no longer do so; and who will make sure that your health care wishes can be (and are) followed. These are some very personal decisions, and a lot of it comes down to who you trust, but there are a few things to consider that may help you decide.

For each of these roles, it is a really good idea to choose alternates as well, in case your first choice is unable or unwilling to help at the time they are needed. You can change the people you’ve chosen at any time by following legal procedures to update your documents.

Executor of Your Will

Your executor is usually the same person as your trustee, if you have a trustee. They will be in charge of dealing with the probate court (if you have a will but no trust, or if you forget to transfer one of your assets into your trust). He or she will need to be trustworthy, as well as capable of dealing with the courts, managing your finances, and interacting with your beneficiaries (the people who inherit your assets). If you do not have a trust, your executor may need to deal with the probate court for 1-2 years or more.

Trustee

A trustee does many of the things that most people think of the executor doing, including distributing your assets after death. They may also manage your assets for you if you become too sick to manage your affairs, or manage things for your kids if they inherit when they are too young (or if for any other reason you want someone else to take care of things for your kids).

Because trusts start from the time you sign them, you also need a trustee while you’re alive and well; most people choose to be their own trustee while they can (and thus continue managing their own affairs).

When choosing a trustee, you can name a friend or family member, a professional fiduciary, or a bank. Whomever you choose, they should be trustworthy and good with money and record keeping. They should be capable of meeting deadlines, complying with the law, working well with your beneficiaries (the people who will inherit your assets), attorneys, financial advisors, and the court.

Banks and professional fiduciaries are a great option. If you don’t have a close friend or family that you trust to manage your life savings, or don’t want to put the burden on them, you can choose a professional. When choosing a professional fiduciary or a bank, consider where they are located (local is best), how much they charge, what is included in that fee, whether they have a minimum value of assets managed, and whether they are likely to still be in business when you need them.

If you are considering appointing a friend or family member, talk with them beforehand to make sure that they are willing and able to do the job.

Agent Under a Durable Power of Attorney

Using a durable power of attorney, you can appoint an agent to manage your financials affairs in case you become too sick to manage them yourself. If you have a trust, most of this will be done by your trustee. However, some assets are not owned in your trust, so the trust doesn’t cover them. For example, somebody may need to pay your PG&E bill, cancel your car insurance, or argue with your health insurance company because they’ve overcharged you; your agent can handle these things.

Attorney-in-Fact for Health Care (Under a Durable Power of Attorney/Advance Health Care Directive)

Your agent for health care is a person you appoint to make health care decisions for you in case you’re ever too sick to tell your doctor what you want. You should also consider your agent’s ability to make difficult decisions and understand complicated medical information.

Discuss the role with your agent before naming them, both to make sure that they are willing to accept the role, and to help them understand your wishes, including your views on life support, heroic life-saving measures, organ donation, and other important health care issues. Your agent is more likely to ensure that your wishes are followed when the time comes if they understand your views and know that you have thought them through.

Conservator

A conservator may be appointed by the court to care for you and your personal needs and/or your finances if you are no longer able to care for yourself. Creating an estate plan may help avoid the need for a conservatorship. However, you should still nominate a conservator in case it becomes necessary. A conservatorship is a more extreme measure, and will only be ordered by the court if you are so unable to take care of yourself that it creates a risk to you if you maintain the power to act for yourself. Conservators are most often nominated in your durable power of attorney and in your advance health care directive.

Guardian of Minor Children

If you have children under the age of 18, you should nominate a guardian to care for them in case you are ever unable to do so. You can choose one person to both care for your child and their estate, if you plan to leave assets to the child, or different people to care for your child (guardian of the person) and manage their estate (guardian of the estate).

The guardian of the estate is usually the same person as your trustee, if you have a trust, as both your trustee and your guardian of the estate are tasked with managing your child’s inheritance.

The guardian of the person should be someone you trust to raise your child with the child’s best interests at heart. You should consider where the potential guardian lives and would raise your child; whether you are comfortable with your child’s exposure to the guardian’s belief system; where your child would go to school; and who else would be living with your child.

If you can, this is one role where it may simplify things if you can agree on your choices with the children’s other parent, since in most situations a guardian will not be appointed unless both parents are unable to care for them.