Most individuals need to establish an estate plan that names at least three separate legal “fiduciary” positions. In some cases, it may be necessary to name as many as five (5) separate legal positions. In some cases, one person may fill more than one fiduciary position, although it is important to carefully consider the roles that each person would play.
Durable Financial Power of Attorney. By this document, you transfer to another person the ability to transact business on your behalf should you become incompetent, incapacitated or inaccessible. This would include banking, insurance, real estate and security transactions.
Health Care Directive. This document allows another person to make health care decisions relative to your personal well-being in the event you should become incapacitated or incompetent. This might include decisions regarding surgery, medication, care professionals and living arrangements.
Personal Representative. Upon your death your designated Personal Representative will gather assets and distribute them according to your Will through the probate court process. This is a short-term responsibility typically completed with the assistance of an attorney.
In certain circumstances, clients would need to establish two additional fiduciary designations:
Guardian. If both you and your spouse die before any one (or more) of your children reach age 18, the person(s) you appoint as Guardian is responsible for the care and custody of any such “minor” children of yours.
Trustee. If you create a revocable trust Agreement, the trustee is responsible for managing and distributing the assets of your revocable trust, in the event of your incapacity and following your death. If you establish trusts upon your death for your children, your named Trustee is responsible for managing those trust assets. The Trustee is responsible for the management of these trusts, including making investment decisions, distribution decisions, and filing tax returns.