Who Does What, When?

When you are doing your estate plan, you have to choose people for certain things. For what jobs do you have to make a selection and what are their duties? Who do you want to benefit, or to not benefit from your assets when you are gone?

There are different roles depending upon the estate planning documents that you have in place and the instructions that you have in those documents. There are generally two main types of jobs, those jobs relating to handling finances and other property and those jobs relating to taking care of you. In today’s column, we will discuss the different people that are associated with you and your estate plan.

Guardian/Ward/Incapacitated Individual

If you have done no planning, a Guardian is a person who is appointed and supervised by the probate court to make medical and mental health care treatment decisions for you when you are unable to do so for yourself. If you have a Guardian, you are called a Ward or Incapacitated Individual.

Conservator/Protected Person

If you have done no planning, a Conservator is a person who is appointed and supervised by the probate court to make decisions regarding your property and financial affairs for you when you are unable to do so for yourself. If you have a Conservator, you are called a Protected Person.

Patient Advocate/Health Care Agent/Patient

In your designation of patient advocate, you as the Patient appoint your Patient Advocate, also called your Health Care Agent, to make medical and mental health care treatment decisions for you when you cannot. Your Patient Advocate can also be given the power to withhold or withdraw artificial life sustaining treatment at end of life. Basically, they would have the power to pull the plug. In most instances, a properly drafted designation of patient advocate, also called a health care power of attorney, can avoid a probate court appointed guardian. The powers granted to your Health Care Agent in your designation of patient advocate generally expire when you do.

Attorney in Fact/Financial Agent/Power of Attorney/Principal

In your financial power of attorney, you as the Principal appoint your Attorney in Fact, also called your Financial Agent or Power of Attorney, to pay your bills, manage your investments and other property for you when you cannot. In most instances, a properly drafted durable financial power of attorney can avoid a probate court appointed conservator. The powers granted to your Financial Agent in your financial power of attorney generally expire when you do.

Testator/Willmaker

If you make a will, you are called a Testator or Willmaker. Your will is only effective after your death through the probate court process.

Personal Representative/Executor/Administrator

A Personal Representative is the person appointed by the probate court after your death to handle your estate finances and other property that you owned in your sole name at the time of your death and which did not have a beneficiary designation. If you name a personal representative in your will, they have first priority to be appointed by the court. The gender neutral term Personal Representative replaces the male terms Executor and Administrator and the female terms executrix and administratrix.

Decedent/Deceased

Decedent is just another word for the dead person. I would rather use the term Deceased because it is more understandable to most people.

Trustmaker/Grantor/Settlor/Trustor

Trustmaker/Grantor/Settlor/Trustor are generally interchangeable terms for a person who creates a trust. Your trust can take effect during your lifetime and continue long after your death.

Trustee/Co-Trustee/Successor Trustee

In your trust, you appoint a Trustee to manage your finances and other property that have been transferred or otherwise funded into your trust. If there is more than one Trustee acting at a time, they are called Co-Trustees. Most of our clients are the initial Trustees of their own trusts while they are alive and well. However, you need to appoint one or more Successor Trustees to take care of your trust property for your benefit when you are mentally disabled or for your designated beneficiaries after your death.

Beneficiary/ Devisee/Per Stirpes

A person whom you name in your will or trust to receive a distribution or use of assets in your estate or trust is called a Beneficiary. A Beneficiary named in a will is also called a Devisee. An asset distribution to be made to a Beneficiary that is Per Stirpes means that if the beneficiary dies before getting the asset or its use, that Beneficiary’s descendants receive the asset distribution or use.

Heir

Your Heirs are who gets your property or “stuff” if you died without a will. The first persons who are your Heirs are your surviving spouse and your children. If your children are not surviving, then their descendants become Heirs. With no surviving spouse nor descendants, your Heirs are your parents and then their descendants. If you still have no Heirs, then go up a generation to your grandparents and then their descendants. This process continues until someone living is found. If there is no one else, the State of Michigan is your Heir.

Disability Panel

In your financial power of attorney or trust, you can have a Disability Panel, usually made up of at least three individuals, who make the determination that you are unable to effectively manage your property and financial affairs. When in your financial power of attorney, the Disability Panel determination then allows your financial agent to act on your behalf, but does not stop you from acting; this is sometimes called a springing power. When your trust Disability Panel makes that determination, you are removed as trustee and then your named successor trustees can take over the trust.

Trust Protector

You can give your beneficiaries or successor trustees the power to appoint an independent third party Trust Protector after your mental disability or death. If there is a change in trust, tax or other laws or a change in circumstances that would adversely affect the operation of your trust or the distribution of your trust assets, the Trust Protector could amend your trust without court involvement to make sure the purposes of your trust are accomplished. I call the Trust Protector the trust mechanic or trust fix-it person.

These are the primary roles in your estate plan that you have to think about filling. There could be others, depending upon your plan and your instructions.

By Matthew M. Wallace, CPA, JD

Published edited April 30, 2017 in The Times Herald newspaper Port Huron, Michigan as: Estate plans: Who does what and when?

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