• Shawna Murray, Attorney

How to Pick Your Trustee, Executor and Agent

Updated: Jan 26, 2019

In estate planning, the trustee, executor, and agent with power of attorney are three titles frequently held by the same person. Each of these jobs are very important and require you to choose a person who can be trustworthy above all else. The person or persons selected will play an important role in your estate plan, so it is crucial to give it this position careful thought.

The care with which you chose a trustee, executor and agent is important because the person or persons who hold these titles in your estate plan are also fiduciaries. The term fiduciary very generally means someone who is legally obligated to act in another person's best interests. When you pick trustees, executors, and agents in your estate plan, you're picking one or more people to make decisions in yours and your beneficiaries' best interests and in accordance with the instructions you leave.

Luckily, understanding the basics of what each of these terms means and what to consider when making your choices can make your estate plan work smoothly.

The Trustee

A revocable living trust is often the center of a well-designed estate plan because it is simply the best strategy for achieving most individuals' goals. In a revocable living trust, your successor trustee will be responsible for making sure your wealth is passed on and managed in accordance with your wishes after your death or incapacity. Like each of the following individuals involved in your estate planning, it's best to have a trusted person or financial institution carry out this vitally important role.

It's important to make the language in your trusts as clear as possible so that your trustee knows exactly how to handle various situations that can arise is asset distribution. Lastly, your trustee will only control the assets contained within the trust — not the rest of your estate. For this reason, it is incredibly important to completely fund your living trust.

An Agent

Your power of attorney is the document in your estate plan that appoints individuals to make decisions on your behalf if you become unable to do so yourself. There are a few different types of powers of attorney, each with their own specific provisions. There is quite a wide range of situations covered by various powers of attorney.

Financial Powers Of Attorney

Financial powers of attorney grant individuals the ability to take financial actions on your behalf such as purchasing life insurance or withdrawing money from your accounts to cover your costs. In most cases, powers of attorney are granted to individuals appointed as agents. However, especially regarding financial decisions, an institution like a trust company can also be named.

Health Care Powers Of Attorney

Health care powers of attorney also cover a wide range of specific actions that can be taken regarding an individual's medical needs such as making decisions about the types of care you receive. For example, a health care power of attorney can be the doctor you most trust to gauge your mental competency. 

The Executor

Your executor is the person who will see your assets through probate if necessary and carry out your wishes based on your last will and testament. Depending on your preferences, this may be the same person or institution as your trustee. In California see this position is also designated as personal representative, but it means the same thing.

Many individuals chose to go with a paid executor and/or a paid trustee. This is someone who doesn't stand to gain anything from your will and is often the best choice if your estate is large and will be divided among many beneficiaries. Of course, family or friends can also serve, but it's important to consider the amount of work involved before placing this burden on your family or friends.

Being an executor or a trustee can be hard work and may have court-ordered deadlines, so it's crucial to pick someone you know will be up for the job. They may need to hire a CPA to help sort out your taxes and a lawyer to assist in the process or to aid in dispute resolution. Therefore, choosing a spouse or someone else intimately involved in your life may not always be the best option, as they may not be up to the task at the time.

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