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    How basic estate planning protects individuals and legacy: Part 2

    Estate planning can help you protect and care for yourself, your family and your practice.

    Once the key estate planning documents are established, it is important to outline the roles and responsibilities of the individuals named to serve in those documents.

    This second part of this series on the basics of estate planning will cover those roles and responsibilities associated with the documents, which include a will, a power of attorney, a healthcare power of attorney, and a living will. The article also will look at how an account or an asset is titled, what types of assets have beneficiary designations, and why it is important to ensure that those you name on those designations are consistent with the overall estate strategy.

    Each estate planning document requires that you name someone to help you either during your lifetime or at death. The key people to name include:

    • Executor
    • Guardian
    • Agent (DPOA)
    • Agent (Healthcare)
    • Trustee

    Read more: How basic estate planning protects individual and legacy: Part 1

    Estate planning roles

    Estate planning rolesOne of the most important decisions in estate planning is picking the person, or people, who will be in charge of your assets and legally obligated to act in your interest. The task of each of these individuals is slightly different. It is recommended to name more than one alternate for each role, but you may also name two persons to act together, such as co-trustees or co-executors.

    Executor

    An executor is someone who carries out the directions in the will. The executor is sometimes referred to as “personal representative” for this role. If you leave no will and your estate is managed by the probate court, this role is sometimes referred to as “administrator.”

    This person is responsible for collecting the assets of the estate, protecting estate property, preparing an inventory of the property, paying valid claims against the estate (including taxes), representing the estate in claims against others, and distributing the estate property to the beneficiaries. It is important to know that the executor only controls property or assets that are subject to probate.

    Guardian

    If a minor child is involved, a guardian needs to be appointed to raise the child in the event both parents die before the child becomes an adult. While the likelihood of this happening is slim, the consequences of not naming a guardian are great. If a guardian is not named, a judge will decide who will raise the child.

    This is an important role to revisit over time. For example, early in the child’s life you might name a parent or grandparent as guardian. As the toddler becomes a teenager, it may be wiser to name a sibling (who is closer in age to you) rather than an aging parent or grandparent.

    Agent (DPOA)

    In a power of attorney, you give authorization to a certain person, or people, to make decisions on your behalf when you are not physically or mentally capable. This person is known as an Agent. Realize that this document and person have control only during one’s lifetime. The power terminates at death, when the will or trust instructions become effective.

    This is an important document to avoid court intervention at a stressful time. Imagine that you don’t have this document and are severely injured. On top of the health concerns, your family may need to deal with court appearances to manage your finances or make certain financial decisions on your behalf.

    Continue to page two to read more...

    John Grande, CFP
    John J., John S, and Traudy F. Grande, CFPs, are the editors of the Money Matters column. They are owners and principals of Grande ...
    John S. Grande, CFP
    John J., John S, and Traudy F. Grande, CFPs, are the editors of the Money Matters column. They are owners and principals of Grande ...
    Traudy F. Grande, CFP
    John J., John S, and Traudy F. Grande, CFPs, are the editors of the Money Matters column. They are owners and principals of Grande ...

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