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Friday, September 1, 2017

Who are the Decision Makers in Your Estate? (Part 1)

Who are the Decision Makers in Your Estate Plan? (Part 1)

 

Within an Estate Plan, there are decision makers that are appointed to make sure your estate runs efficiently and appropriately after you are gone.  Some of these decision makers will play a very small role and some will have a larger, more active role in the administration of your estate.  Appointing these decision makers is an important task when planning for your estate, and that is why we are breaking down the key decision maker’s roles here:

 

Successor Trustee

In a Revocable Living Trust, a Successor Trustee is named when the Trustee can no longer continue as such due to incapacity, death, or other circumstances.  A Successor Trustee virtually steps into the shoes of the Trustee and completes the tasks as the Trustee.  Mostly, the Successor Trustee manages the Trust and follows the directives laid out in the provisions of the Trust, such as distributions or keeping the trust running.  It is important to name more than one Successor Trustee, as it is a major responsibility, and therefore having multiple appointees will ensure that your directives are followed effectively and with little to no interference by the probate process.  For more information on incapacity, click here.

Personal Representatives

A Personal Representative is an individual (or sometimes an institution) that oversees your estate after you pass.  A Personal Representative can be appointed by the court or named in your will.  Being a Personal Representative over someone’s estate can include a broad range of responsibilities including, but not limited to, overseeing certain tasks or provisions within the estate plan, approving distributions, being included in decisions concerning the estate, etc.  If you have been appointed as a Personal Representative of an estate or you are thinking about appointing someone to be Personal Representative, continue reading! I have outlined some main points to consider whether you are a Personal Representative or you are the grantor appointing the Personal Representative. 

Often, Personal Representatives are close family or friends to the grantor. However, institutions can act as Personal Representatives as well (i.e. an attorney, a bank, trust company, other companies, etc.).  First and foremost, make sure that the individual you want to appoint understands and agrees to be the Personal Representative of your estate.  This is a job, (see below) and therefore will require some time and attention until the estate is closed, which can last for years depending on the complexity of the estate.  If you do not have an estate plan, and your estate goes through the probate process, the court will appoint a Personal Representative within the guidelines of state law, which can be an issue on its own.  For more information on the probate process in Nevada, click here. Therefore, planning for your estate and Personal Representative ahead of time will enable you, the grantor, to have more peace of mind in knowing that the person you chose has your best interests at heart.

Personal Representatives are reimbursed for all legitimate out-of-pocket expenses incurred in the process of management and distribution of the deceased’s estate.  In addition, Personal Representatives may be entitled to legal fees and extraordinary compensation under Nevada state law.  Learn more about compensation here.  The Personal Representative must fulfill his or her fiduciary duties on behalf of the estate with the highest degree of integrity and can be held liable for mismanagement of estate assets in his or her care.  Hiring an attorney and/or an accountant to advise the Personal Representative are options available as well.

Agent (Durable Power of Attorney)

An Agent is appointed to handle your affairs.  This is a very broad and individualized role in the realm of estate planning.  A Durable Power of Attorney officially gives the Agent the ability to act on your behalf when it comes to financial decisions (i.e. check signing, property sales, paying bills, bank transactions, etc.).  It is “Durable” in that in the event that you become incapacitated and/or cannot act on your behalf anymore.  An Agent with Durable Power of Attorney should be someone who you trust and someone who is capable and knowledgeable about your financial situation and needs. Durable Power of Attorney ends at death and therefore the Agent ceases to act as Durable Power of Attorney and the Estate process begins.

Agent (Durable Power of Attorney for Healthcare Decisions)

This type of Agent deals solely with healthcare decisions.  In the event that you become incapacitated, this individual or entity would make any decisions relating to your health as you would want.  This responsibility may include decisions dealing with admittance or discharge from the hospital or health care facility, treatments, medical record disclosure, etc.

We have covered a few key decision makers here, Part 2 will offer for more information on some key decision makers!

 

-by Laura Bown (Law Clerk/JD Candidate, 2018, Boyd School of Law, UNLV) with Tiffany Ballenger Floyd, Esq. (Nevada & California Estate Planning Attorney), Phillips Ballenger, PLLC


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