Creating an estate plan involves more than deciding who will inherit your assets. Just as important is selecting the fiduciaries who will carry out your wishes upon your incapacitation or death. These trusted individuals may serve as personal representative, trustee, agent, patient advocate, or guardian. Each role carries different responsibilities, and the best choice for one position may not be the best choice for another. Understanding the responsibilities of each fiduciary role can help make thoughtful decisions about who should serve in each role.
Personal Representative / Trustee
A personal representative and trustee are responsible for administering a probate estate and trust, respectively. An ideal personal representative or trustee should be:
- Trustworthy,
- Diligent,
- Organized, and
- Impartial.
Their duties are similar and typically include locating and safeguarding assets, paying debts and taxes, communicating with beneficiaries, selling assets, and distributing property.
Agent
An agent manages financial and legal matters during your life if you become unable to do so. An agent may handle tasks such as paying bills, managing bank and investment accounts, buying or selling real estate, filing tax returns, applying for government benefits, and hiring professionals.
These activities are similar to those performed by a personal representative and trustee, they are just performed prior to death. As such, the same persons named for those fiduciary roles may make a good agent as well.
Patient Advocate
Michigan law allows you to appoint a patient advocate to make medical decisions if you are unable to participate in your own healthcare decisions. The best patient advocates are:
- Willing to advocate your healthcare preferences,
- Calm under pressure,
- Emotionally resilient, and
- Immediately available for urgent decisions.
A patient advocate may be called upon to communicate with physicians, nurses, and family, consent to or refuse medical treatment, review medical records, make decisions regarding long-term care, authorize hospice care, or cease end-of-life care.
Guardian
Parents of minor children also nominate guardians to care for their children if neither parent can provide care. Such a guardian assumes many of the responsibilities normally performed by parents, including making educational, medical, and day-to-day parenting decisions. A guardian should be:
- Compassionate
- Patient
- Responsible
- Emotionally mature
It is also important to consider parenting philosophy, religious and moral values, geographic location, age, health, and the ability to provide a stable home environment. This is often the most difficult of the fiduciary roles to decide upon.
Final Thoughts
An estate plan is a roadmap that depends upon capable people to carry out your wishes. Choosing fiduciaries based on the unique demands of each role can help minimize conflict and ensure your affairs are handled with care.
Avoid selecting someone simply because they are the oldest child or because family members expect it. The best choice is the person most capable of responsibly handling the decisions involved with each role.
Moreover, it’s also a good idea to select more than one person for each role. The person you name today may later become unable or unwilling to serve due to illness, relocation, age, or other personal circumstances.
Many people choose a spouse or an adult child. Others select a trusted sibling, close friend, or another relative. If family dynamics are difficult or the estate or trust is particularly complex, a professional fiduciary or corporate fiduciary may be an appropriate choice.
Lastly, review your estate plan every few years and after major life events such as marriage, divorce, births, deaths, relocations, or significant changes in health or finances. The people who were the best choices ten years ago may not be the best choices today.
