Frequently Asked Estate Planning Questions

Estate planning questions stop many people from moving forward and taking action to protect themselves, their loved ones and their hard-earned assets. We hope these answers to frequently asked estate planning questions help make the process seem less confusing.

What is an Independent Executor?

An independent executor is a person or corporate fiduciary named in a Will with the responsibility of gathering and identifying your assets, paying your debts and distributing your property as you specify in your Will (which may be to the living trust your created during your lifetime). You may name one or more independent executors to act at the same time. An independent executor is not authorized to act until appointed by a court probating the Will. It is prudent to name at least two successor independent executors in case your first choice is unable to act.

What is a Trustee?

A trustee is one to whom property is transferred for the benefit of a beneficiary. In a revocable trust, the creator of the trust, the trustee and the beneficiary are often one and the same while the creator of the trust is alive. The revocable trust document should name one or more successor trustees to manage the assets after the creator of the trust dies or is otherwise no longer able to act as trustee. A trustee named in a Will is responsible for receiving certain estate assets from the independent executor, and for carrying out the provisions of the irrevocable trust established under the will. The trustee of a trust created under a Will is also responsible for investing and managing the assets and determining the distributions to the beneficiary. As with the independent executor, more than one trustee may be appointed. The trustee may be an individual or a trust company or bank with trust powers. It is prudent to name one or two successors in the event the originally named trustee is unable to act. More than one trustee may be appointed to act at the same time.

What is a guardian of the person of my minor or incapacitated child?

There are two kinds of guardians – guardian of the person and guardian of the estate. The guardian of a child’s person has the responsibility for making sure that the child’s physical needs are met. You may designate in your Will or in a separate document an individual to be the guardian of a child’s person and to assume the care of the minor or incapacitated child upon the death or incapacity of the last of the child’s parents to die or become incapacitated. The guardian of a child’s person and the trustee holding the portion of your estate passing to your minor or incapacitated child may be the same person. On the other hand, you may prefer that the guardian of the person and the trustee be different individuals. It is contemplated that the trustee would make distributions to the child’s guardian to take care of the child’s physical needs. You should name successors to act in the event the first guardian is unable to do so.

What is a Statutory Durable Power of Attorney?

A Statutory Durable Power of Attorney is a document in which you name an agent to make financial and property decisions for you. The power of attorney may be effective immediately or when a doctor certifies that you are not able to handle your financial affairs. The Statutory Durable Power of Attorney helps to avoid a court appointed guardian if you ever become incapacitated. If you wish to grant your agent the power to make gifts, this must be specifically provided for in the power of attorney. It is good practice to name one or more successor agents to act in the event the first agent you name is unable to do so.

What is a Medical Power of Attorney?

A Medical Power of Attorney is a document in which you name an agent to make medical decisions for you in the event you are unable to do so yourself. This document becomes effective only if you are unable to communicate a medical decision. Unless you limit your agent’s authority, your agent has the power to withhold or discontinue life support.

What is a Directive to Physicians (often referred to as a Living Will)?

The Directive to Physicians (sometimes referred to as a living will) states that if you are ever certified by two physicians to have a terminal condition, you do not want your life prolonged by artificial means.

What is a HIPAA Release?

A HIPPA Release identifies those individuals who have your permission to discuss medical decisions with your healthcare providers. It is not a decision-making document; it only allows access to your medical information. It is effective immediately when a healthcare provider receives a copy. You do not have to be incapacitated before it becomes effective.

What is a Declaration of Guardian in the Event of Later Incapacity?

A Declaration of Guardian in the Event of Later Incapacity helps to preserve the integrity of your estate plan. One way to challenge your estate plan if you should ever become incapacitated is for the challenger to go to court to ask to be appointed your guardian. To avoid this, you should name the agents you have designated in your Statutory Durable Power of Attorney and your Medical Power of Attorney to be your guardians if a guardianship over you is requested. That way you remove the incentive for anyone else to apply to be your guardian.

What is a Disposition of Remains Document?

One of the most considerate things you can do for your family is to leave instructions concerning the final arrangements for your body after you pass away. A Disposition of Remains document allows you to give instructions regarding burial or cremation and memorial services.

Does it matter how my financial accounts are titled?

Like the beneficiary designations on life insurance and retirement accounts, how a financial account is titled determines whether the account passes in accordance with a Will or trust, or whether the account passes to beneficiaries named on the account. A Will or trust cannot override a beneficiary arrangement on a financial account. Examples of the kinds of accounts that override a Will or trust are accounts held as joint tenants with right of survivorship, community property with right of survivorship, and accounts that name a “payable on death” (POD) or “transfer on death” (TOD) beneficiary.

What role do Beneficiary Designations Play in an estate plan?

There is a common misconception that a Will or trust controls how life insurance and retirement benefits pass to beneficiaries; but in reality, retirement benefits and life insurance pass by naming a beneficiary in a document provided by the retirement account administrator or life insurance company. If there is a conflict between a Will and the retirement account or life insurance beneficiary designation, the beneficiary designation overrides the Will. That’s why it is so important to make sure that beneficiary designations are coordinated with your overall estate plan.