Without other people to act on your behalf, your estate plan wouldn't exist. Choosing the right legal representatives and beneficiaries for one requires thought and care; they must also be willing to serve in those roles. When you choose them, you should weigh certain factors in your decision.
Considering the Right People to Carry Out Your Wishes
Basic estate planning documents include a will, a power of attorney, and an advance health-care directive; your estate plan may also include a trust. The representatives you name in them should be honest, trustworthy, reliable, and capable.
Personal representatives and trustees:
- Managing a trust or a will requires organization, interpersonal skills, and the ability to handle challenges. The responsibilities can include settling taxes and debts, managing assets, and keeping records.
- A personal representative of your estate might also be the one to notify others of your passing, get death certificates, and perform related tasks, including settling probate (if necessary).
- If a trust is necessary, name a trustee as the manager. For impartial decision-making, especially for high-net-worth individuals, consider naming a financial institution or trust organization. Many trust management duties can be done remotely, allowing the designee(s) to live out of state.
Agents under power of attorney/agents for health-care decisions/attorneys-in-fact:
- Your agent under power of attorney might need to perform tasks daily. They must make sound decisions as they act in your best interest to manage financial or health-care responsibilities. The role suits someone who lives nearby.
- Ideally, a health-care agent is compassionate, able to understand the health conditions involved, and comfortable talking to medical staff.
- Often, the agent is a spouse or a significant other, but you may choose a friend, a relative, or another adult. We usually recommend naming someone as the primary agent and at least one other as a successor agent.
- For minors, adults with special needs who aren't independent, and in some cases, pets, name someone to care for and provide for them. Guardianship is more of a day-to-day role, while conservators often handle financial decisions for incapacitated adults. Choose one or two alternates for these roles. For adults with disabilities who need care, you may also create a special needs trust or make other arrangements.
Beneficiaries:
- Your heirs are family members entitled to receive part of your assets; a beneficiary is a spouse, another loved one, or even an organization you leave them to. Beyond a will or a trust, you may also name beneficiaries in other legal devices, such as retirement accounts and insurance plans.
If possible, choose several people for these roles. Naming alternate representatives relieves the burden and ensures the effectiveness of your estate plan in unexpected situations.
Choosing Each Player for a Winning Team
No two people or families are alike. Consider all aspects of your situation. For example, multiple marriages can result in blended families. Others might have no children but have strong support from relatives and friends.
When you evaluate who it is that you want to have represent you or receive your money or property, explore your relationship with each person. Assess their needs and values. Hold open and honest conversations with your loved ones about your plans to ensure they understand and respect your intentions. Gauge their comfort levels in fulfilling these roles.
Be specific in naming them in your documentation. Take this step seriously but remember that you can update your choices later.
Your beneficiaries and legal representatives, after all, are responsible for shaping your legacy. To choose a winning team, plan wisely and consider everyone's interests, capabilities, and well-being.
For advice on who to add to your estate plan, contact us online or call (207) 377-6966 today. We would be happy to help you create one that names the right beneficiaries and legal representatives for you.
