The People Involved in Your Estate Plan

Estate planning is the process of making decisions about what happens to you, your money, and your property when you pass away or can no longer make decisions for yourself. Everyone over the age of eighteen has the need for some level of estate planning. Regardless of the amount of your financial wealth, it is important to have the proper planning in place.

A critical part of your estate plan is the people you name in various roles.

Do You Have the Right People Involved?

Creating an estate plan often involves more people than you may initially realize. Without the right people in the right roles, your estate plan may fall short and be ineffective. The following people involved in the estate planning process have different but essential functions and are critical to identify as part of your plan:

1. Personal representative of a will. A personal representative is the person responsible for settling your affairs, including collecting and securing your property and accounts, paying your creditors, filing and paying any necessary taxes, and distributing your remaining assets to the beneficiaries named in your will, or if you pass away without a will, the heirs as determined by state law. When selecting a person for this role, it is important to choose someone you trust who can take on this time-consuming process and see it through until the administration of your estate and probate of your will is complete. If you do not have a will, the court will appoint a personal representative for your estate according to state law, and your property and accounts will be given to the heirs that the state has determined should receive your assets. 

2. Trustee of a revocable living trust. A trustee is the person or entity responsible for managing the money and property in your trust. You typically will serve as the initial trustee of your living trust, and then name other individuals or a company to serve as the backup, or successor, trustees. In general, the trustee carries out your wishes and instructions as outlined in the trust agreement, so this document determines the scope of the trustee’s responsibilities. Typical responsibilities include managing and investing trust property and accounts, paying bills, filing taxes, and distributing your possessions to whomever you have listed in your trust. It is critical to choose someone you know and trust and can handle the responsibility. The trustee you choose should be one who is capable of handling the type of assets involved, as well as the detail as to how the assets are held and managed and eventually distributed out of the trust. Trustees are considered to be fiduciaries, and are held to a high standard of legal responsibility.

3. Agent (in a financial and healthcare power of attorney). An agent is someone to whom you give authority to act on your behalf. Your estate plan should name agents both for financial and healthcare matter. The financial power of attorney gives your agent, known in Michigan as your attorney-in-fact, the authority to manage your financial affairs when you are still living but unable or unwilling to act, including paying your bills, filing your taxes, and managing your property. The power you give to your agent in your financial power of attorney will coordinate with the power you give to your successor trustee in your living trust. The healthcare power of attorney authorizes your healthcare agent, known in Michigan as your patient advocate, to make decisions on your behalf only when you are unable to make decisions yourself, for example, when you are unconscious, under anesthesia, or otherwise unable to communicate with the healthcare providers yourself. Both the healthcare and financial agents can only act with the powers and within the scope that you have specified in the powers of attorney. When selecting an agent for these roles, note that they do not have to be the same person. Next, make sure the appointed individuals will do what you want and not what they want. Finally, it is important to make sure you communicate your wishes to your designated agents to ensure that they do things the way you want them done. 

4. Guardian for minor or dependent children. Another critical ingredient in your estate plan is naming someone to care for your children or other dependents if you are unable to, either due to incapacity or death. When choosing a guardian for your children or dependents, consider someone you trust whose values are similar to yours. Selecting a guardian can be a very difficult task, but if you do not choose someone yourself, the court would have to choose someone if the need arises. 

5. Heirs or beneficiaries. Heirs or beneficiaries are the people or entities, such as a church or charity, that you choose to receive your assets after you pass away. Heirs are the family members that state law determines if you do not create a will or trust yourself. Beneficiaries are the persons or organizations that you have identified in a will, trust, or other legal document to receive your assets. Your estate plan should clearly identify your intended beneficiaries, what they will receive, how they will receive, and when they will receive the assets that you leave to them.


We Can Help You

Our office has a history of creating satisfying estate plans that bring peace of mind and help our clients avoid some of the challenges associated with transferring property and money at the time of their disability or death. Schedule an appointment online or call our office to arrange a time to meet to discuss your planning needs. We are available to meet virtually or in person.