Estate Planning Questions and Answers

For most trusts, you are going to be the initial trustee.  You will need to select a successor trustee to act when you no longer can. To figure out how to select the right person for the job, first consider whether the trustee should be an individual or a financial institution. If choosing an individual, pick someone you know who is diligent, detail-oriented, and whom you trust to carry out your clear instructions.

A successor trustee (either an individual or institution) serves as a back-up, or replacement, to the original trustee (usually you) when the first trustee passes away or is incapable or unwilling to perform their duties regarding the management of your trust. As successor trustee, he or she will be in charge of managing the assets owned by the trust and ensuring that the assets are managed or distributed according to the terms of the trust.

While it’s straightforward enough to pick a friend or family member you think will be up to the task, picking a corporate trustee is the best option for some people. Banks and trust companies that focus on trusteeship provide expert management. Being unrelated to your personal life, you can also rely on them to be impartial. However, corporate trustees do charge for their services and may have minimum asset requirements.  

A will also ensures your assets will go to the places and people you want them to. Having a will drafted ensures that your loved ones will get the support they need after you’re gone. The lack of a will hands the responsibility of sorting out your estate to state law and probate court.

Guardians and conservators are court-appointed individuals who make decisions on an adult’s behalf in the event of mental or physical incapacity. These decisions can range from where you live to making sure that your bills get paid. These court-supervised helpers can be avoided by adding proper financial and medical powers of attorney, and explicit directions for them, to your estate plan.

Not having an estate plan comes with many of the same pitfalls as the lack of a will. Lacking a will resigns many of the distribution responsibilities for your estate to your state’s law and the probate court. A sound estate plan gives you the peace of mind, knowing that everything will properly be attended to and taken care of, saving your family and loved ones time, money, and plenty of headaches.

While there is some overlap, health care and financial agents are two distinct roles in an estate plan. Your health care agent, also referred to as health care power of attorney or health care proxy, is responsible for making medical decisions on your behalf and may also implement your pre-arranged instructions if you experience incapacity. Likewise, a financial agent can manage your money by paying bills, filing taxes, purchasing insurance, and adjusting investments for you if you become unable to do so yourself. You may choose to appoint the same person or you may select different people. It’s up to you to decide who is best for each role.

A personal representative is the same as an executor. This is the individual or institution named in a will who becomes responsible for carrying out the instructions provided in your will during the probate process.

A trust protector is an individual named in a trust to ensure that your estate planning goals and intent are carried out if the law or other circumstances change. A trust protector can be empowered to update your trust without court interference or mandate to carry out your wishes.  This is extremely helpful once you have passed away and cannot make the changes yourself. Although there is no legal requirement that you appoint one, a trust protector is often an excellent addition to an estate plan.

This role can be carried out in a couple of different ways. You can appoint an individual that you trust to step in if the need arises. Because this is not a role that has ongoing responsibilities, there is not the same time commitment as that of a successor trustee.  You could also appoint an attorney or other professional to step in if necessary.

A will governs over probate assets, which are assets in your sole name without a beneficiary when you pass.  If you have probate assets, a will would be admitted to probate court and a probate estate would be opened.  The will appoints your personal representative, also know as an executor, and dictates who is to receive your assets.  If you have minor children, the will is where you will designate who you want their guardian to be in the event of your untimely death.

A trust distributes assets without the need for probate court.  Any assets held by the trust are subject to the distribution provisions laid out in the trust.  The successor trustee is the person or people you would select to manage your trust assets, pay any debts, and make distributions to the beneficiaries. 

A trust is generally preferred to a will.  People generally desire to have their assets transfer to their loved ones outside of probate court.  While you can avoid probate court by designated beneficiaries on your assets or jointly owning assets, a trust allows you to be more complex with your distribution plan and provides your successor trustee with more control over how assets are managed.