Part of what makes estate planning successful are the different estate roles. Unfamiliarity with these roles and their functions should not keep an individual from creating an estate plan. Learning about some of the functions of these various estate roles can take the mystery out of planning, and a reputable lawyer can help.
Important Considerations for Choosing Someone for an Estate Role
While it can be tempting to ask a loved one or a person you know to be a part of your estate planning, it would be a grave mistake to name them as such on this basis alone. Handling an estate is a serious job that can require a great deal of time, patience, and wisdom.
Before naming anyone to an estate role, do your due diligence and keep the following considerations in mind:
- Will they be willing to take on the role you have in mind for them?
- Do they live close enough to perform the duties you have named them to do?
- Are they trustworthy?
- Are they discreet?
- Do they have sound decision-making skills?
- Are they detail oriented and organized?
- Are they well versed in finance, and do they possess financial common sense?
- Will they treat others justly?
If your answer to any of these questions is no, give yourself a moment of pause and reconsider if you want to incorporate this particular individual into your estate plan.
Common Estate Roles and Their Functions
If new to estate planning, the terminology can be confusing and sometimes overwhelming. However, much of the verbiage surrounding estate roles is repetitive and can become clearer by learning a few key phrases and their definitions.
Some of the most common estate roles are:
- Testator: This term refers to an individual who has a will in place.
- Beneficiary: A beneficiary is a person or entity that receives assets from a person who has passed. The executor of the estate or trustee typically distributes assets to beneficiaries.
- Heir: An heir is a person that is typically entitled to inherit at least some of the assets of a person who passes away without a will in place.
- Fiduciary: A fiduciary is a type of person who is to act in the best interests of a beneficiary or ward. This position should go to an individual that is capable and trustworthy because they are obligated to act in good faith. Many other estate roles are examples of fiduciary positions such as executors, trustees, and guardians.
- Executor: An executor is a person who usually works in tandem with an attorney and financial advisors to handle the deceased individual’s financial affairs such as paying remaining debts, distributing property, and filing taxes. They generally administer the estate and handle probate as needed. This role may last up to a year or more, especially when involving probate.
- Trustee: A person acting as trustee becomes responsible for assets that are to be transferred to a trust. Other duties are not limited to but may include filing trust income tax returns, keeping trust accounts, and distributing assets to beneficiaries as directed. This estate role should go to a person who is regarded as trustworthy, discreet, and fair. It is often recommended that this position not go to a person who is listed as a beneficiary, although a beneficiary can be the trustee of their own trust. Some variations to this position include a co-trustee, a contingent trustee, and a successor trustee.
- Co-trustee: This is a joint position in which two individuals share the position of trustee together.
- Contingent Trustee: This type of trustee exists if a specific future event takes place. It can be predetermined by the testator.
- Successor Trustee: A successor trustee is generally a position of last resort as it is only given to an individual when the first designated trustee is no longer able to serve.
- Agent: An agent is typically an individual named to legally act for the benefit of an incapacitated or disabled person. Naming someone as an agent is sometimes referred to as giving them the power of attorney. Under a valid and legal power of attorney, an agent may manage an individual’s financial and legal affairs for a specified period of time.
What to Look for in a Texas Estate Planning Attorney
Experience – Attorneys with years of experience have usually represented hundreds of clients with their estate planning services so they have a keen understanding of what to expect and how to navigate difficult situations.
Knowledge – Although an attorney should be licensed to practice law in the state of Texas, it is also important that they know the state laws specifically regarding estate planning. This is particularly vital in terms of ensuring all estate planning documents are valid should they go before a court of law.
Reputation – It is best to go with an attorney given good reviews by previous clients and even colleagues within the industry. This generally shows they are highly respected and capable of solid estate planning representation.