By it’s very nature, creating—and periodically updating, an estate plan requires us to involve others. Importantly, for example, when young children are involved, a guardian must be designated. Wills rely on personal representatives, typically referred to as executors, and trusts require trustees. Carefully designating and preparing these fiduciaries is essential.
Understanding Fiduciary Designations
When it comes to estate planning, we tend to leap into intentions for assets and beneficiaries. While care in designating beneficiaries and periodically updating those arrangements based on life changes like births, marriages, divorces, illnesses and so on, is clearly important, we don’t want to neglect attention to the appointment of the fiduciaries needed to ensure our intentions can be carried out. As DS Law explains:
A well-thought-out estate plan involves numerous individuals that you designate to carry out your stated preferences….Choosing these crucial decision makers is not a matter to be taken lightly. They will be exercising considerable control over you and your affairs and must be trusted to act in your stead…They include:
Personal representative: The person you appoint to administer your estate through the probate process after you pass away
Trustee: The person you name to manage your trust’s money and property
Guardian: Somebody to whom you give the legal responsibility to care for your children, including adult children who lack the capacity for self-care
Power of attorney agent: A chosen individual who has the legal authority to handle medical or financial affairs on your behalf if you become unable to manage your own affairs
When you work with an estate planning lawyer, you will create a will or trust—or even a combination. In doing so, you will designate a loved one, friend or professional to serve as your fiduciary. This person is generally referred to as the executor, trustee, or personal representative, depending on the circumstances and location. If you have minor children, it is also important to designate a guardian. Regardless of the specifics of your plan, the fiduciaries you appoint have a legal responsibility to carry your affairs, in accordance with the intentions set forth in your estate planning documents—and the law. Fiduciary Bonds are frequently requested—and sometimes even required. Sometimes alternatively referred to as personal representative, executor, trustee or guardianship bonds, fiduciary bonds safeguard the interests of the estate and your beneficiaries in accordance with state law. At Colonial, a leading national provider of all types of fiduciary bonds, the steps to obtaining personal representative, executor, guardianship or trustee bonds are easy: get a quote online, fill out the information, and enter a payment method. Print or e-file the bond right from anywhere—even the law office. Choose and Obtain Fiduciary Bonds In Minutes Here.
Twists, Turns and Back-up Plans
Life brings all of us twists and turns. That goes for you and your designated fiduciaries. Estate planning experts suggest appointing back up fiduciary designees, in case those you originally appoint cannot ultimately fulfill the role. It’s also important to keep your fiduciaries up to date with any shifts in your intentions or circumstances and the pragmatic information required to access the important documents, accounts and contacts they will need to efficiently carry out your estate plan. As estate planning experts also point out:
People’s lives—and your perception of their lives—can change dramatically…and certain changes might impact their ability to serve you. For example, you might find out that a trustee has had problems handling their finances, which calls into question their ability to handle trust funds on behalf of your beneficiaries…It does not have to be suspect behavior to make you question your decision; it could be something as benign as age. Somebody who makes an ideal guardian in their 30s, 40s, and 50s might be less than ideal in their 60s and 70s. Similarly, a legal guardian might be too young at the moment—but the perfect candidate in five to ten years.And what would happen if the guardian you name dies or becomes disabled? A replacement may also be required if a named decision maker approaches you and declares that they would rather not be in that position.
All of these are important examples of how we can never be certain of our own situations—or the challenges those we trust might face. One of the values of advance, proactive estate planning is that with a foundation in place, we can periodically reflect on what has changed and make adjustments accordingly, so as to leave our affairs in the best possible order for our loved ones. Learn more about the role of fiduciary bonds in estate planning right here.
Resources for Estate Planning Attorneys
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