One key part of creating your estate plan that deserves thoughtful consideration is choosing who will carry out the wishes in your will and who will make decisions on your behalf if you become incapacitated.
“These designations are important and should be considered very carefully, no matter the size of the estate,” says Samantha Weyrauch Davis, an estate planning attorney and director with Hall Estill, a law firm in Tulsa, Oklahoma.
Here are a few tips for choosing who to serve as executor of your estate, trustee, and those with powers of attorney:
The role of executor is a big job, from filing your will with the court to paying off your debts, closing your accounts, and seeing that your remaining assets are distributed according to your will.
Therefore, the person chosen for this role needs to be both trustworthy and organized. They also need to be able to balance this job with their other life responsibilities.
According to online software provider estateexec.com, it takes an average of almost 16 months to settle an estate (11 months on average for estates worth less than $10,000, and 3.5 years for estates worth more than 45 million).
Also, if you’re considering naming co-executors, Davis says to be sure they would be able to work together. Shared duties could also greatly complicate things.
“I usually recommend to clients that it’s best to have one person in that role,” Davis says. “There would be just one signature required instead of two [on documents], which can take longer and sometimes become cumbersome.”
Finally, it is wise to ask the person you choose if they are willing to serve as executor before finalizing your will. You will likely want to name a contingency executor in case the situation changes, too.
“You should discuss…your expectations,” says certified financial planner Niv Persaud, founder of Transition Planning & Guidance in Atlanta. “It’s a lot of responsibility, and they may turn it down.”
The same general attributes should apply to a trustee if you create a trust as part of your estate plan. You can choose a professional such as an attorney, accountant, or a trust company (or trust department at a bank) to serve these roles if finding someone in your personal life for these jobs is too challenging.
Married couples often name one other as executor, but it’s important to carefully choose the backup person.
Executors are also paid a fee based on state law, although some individuals choose not to receive pay, Davis says.
Powers of attorney
You may want to create two separate documents for powers of attorney: one for health-care decisions and one for financial decisions. A number of people choose two different individuals to serve in those roles.
The person with the power-of-attorney designation on the medical side can make important health-care decisions when you are unable to do so. If you have a living will in place, this can help guide this individual’s decision-making.
Like with an executor, you should first make sure this person would be comfortable in that position. You should also communicate your wishes with them in advance.
For financial powers of attorney, the person you choose should have the same type of characteristics as the executor. They should be able to handle your finances, pay your bills, and handling other money matters on your behalf if you cannot.
“You can also decide how broad or specific the role will be,” says Persaud. “For example, [the person] could access your account to pay bills but not make investment decisions.”
Revisit your decisions
Davis recommends revisiting your estate plan every three to five years, and sooner if you experience any major life change before that.
Keep in mind, too, that everyone’s life situation can change, so it’s wise to check in and confirm that each person chosen for these roles is still up for the responsibility.
For help with your estate plan, contact us at Wilson and Wilson Estate Planning and Elder Law, LLC at 708 482 7090 for our main office in LaGrange, Illinois or at 847 656 8958 for our Northbrook, Illinois office.