When setting up your estate plan there are many different people who you may ask to help follow-through with various tasks in the event of your incapacity or death. This document outlines in general terms the various roles of estate planning helpers. Of course, every situation is different, so if you have questions about how these roles are to serve, please ask. We are here to help you understand your plan.
Part I: Medical Helpers
1.01 Medical Power of Attorney
In this document, you appoint an “agent” to help make your health care decisions if you become unable to make them yourself.
A health care agent may consent, refuse to consent, or withdraw consent to medical treatment and may make decisions about withdrawing or withholding life-sustaining treatment. An agent may not consent to voluntary inpatient mental health services, convulsive treatment, psychosurgery, or abortion. A physician must comply with a health care agent’s instructions or allow the principal to be transferred to another physician.
1.02 HIPAA Release
The Health Insurance Portability Accountability Act does not allow medical providers to communicate with anyone unless you authorize such communication. In this document, you list the people who are allowed to communicate with your medical providers and learn about your medical care.
1.03 Directives to Physicians
If you become (i) incapacitated, (ii) cannot communicate and (iii) are suffering from a terminal or irreversible condition, you may or may not want life sustaining treatment. In this document, if you are ever in this condition, you affirmatively let your health care agent know whether you want life sustaining treatment.
1.04 Disability Panel
If you become unable to serve as trustee of your living trust because you have become disabled, the disability panel may meet to determine if you meet the definition of “disability.” If all the members of the disability panel unanimously agree that you are disabled, they may vote to remove you from serving as trustee and the successor trustee will take over your duties.
For many of us, we may become disabled prior to our death. The disability panel allows the people who you trust to make the determination of disability rather than spend time trying to get you to a physician who will make that determination.
1.05 Disposition of Remains
In this document, you determine if you want to be buried or cremated or some other form of disposition of your remains. The agent listed is responsible for carrying out your stated wishes.
Part II: Financial Helpers
2.01 Successor Trustee
During your lifetime and while you have full capacity, you will serve as trustee of your living trust and manage all the assets owned by your living trust. If you become incapacitated, then you have named a “successor trustee” who will take over and manage the assets in the living trust.
A successor trustee is a fiduciary position. The trustee’s job is to manage the property owned by the trust according to the terms of the trust. They are acting as stewards over the property for the benefit of the beneficiaries. A trustee’s typical duties will be: to manage trust assets, to file and pay taxes for the trust entity if needed, distribute trust assets according to the terms of the trust.
Depending on the trust assets contained within the trust, and the tax strategy utilized within the trust, the trustee’s job can range in difficulty from simple to very complex. Trustees are allowed to use the trust assets in order to hire accountants, attorneys, or other advisors as needed in order to carry out the terms of the trust.
2.02 Financial Power of Attorney
In this document, you appoint an agent to act for you to manage the assets that are not owned by your living trust. Your agent is authorized to transfer property to your living trust, to make withdrawals from your retirement assets, or to make other financial decisions regarding assets that are not owned by your living trust (i.e. sell a vehicle). Like a successor trustee, the financial agent serves in a fiduciary capacity to act in your best interest.
Upon your death, the agent under the financial power of attorney ceases to have any authority.
2.03 Executor
While it is intended that your assets will pass to your intended beneficiaries without going through the court probate process, in the event a probate is needed, you have a will that names an executor. An executor is the person who manages your probate case in the probate court. This includes making court appearance(s), collecting all assets owned by the estate, paying estate debts and transferring assets to your living trust for administration. Like a successor trustee, the executor serves in a fiduciary capacity.
2.04 Care Manager
A care manager is a person or group of persons who can work with the trustee to advocate for the benefit of the trust beneficiary. The care manager visits the beneficiary on regular recurring basis to assess the beneficiary’s needs and to ensure the beneficiary is maintaining a safe, healthy and comfortable living situation. The care manager works directly with the trustee to ensure the financial resources are being used for the things the beneficiary needs. The trustee may establish a bank account so that the care manager has access to a portion of funds to help in the care of the beneficiary.
2.05 Trust Protector
The trust protector’s job is to represent your long-term intentions to ensure your goals are met, even when you are no longer around. When circumstances change that impose new adverse consequences, or when new opportunities emerge than can benefit those in the trust, instead of implementing an expensive and administratively burdensome court proceeding, the trust protector can be asked to save the day. The trust protector does not monitor the day-to-day activities of the trust, but is only asked to step in when needed.
The trust protector will typically have the following powers:
- alter the administrative and investment powers
- more fully comply with the grantor’s stated intent
- correct ambiguities and scrivener errors that might otherwise require court construction or reformation
- alter the trust to adjust for changes in tax and legal changes.
We hope these estate planning job descriptions provide you with at least an outline of the general duties of the various roles within your estate plan. Estate planning can be complex and we ask that you please reach out to us with any questions.
