Confusion seems to abound among non-lawyers (and, unfortunately, some lawyers) about the various roles people or institutions can play in typical estate plans. These are the “personnel decisions” in estate planning. Clients often question what it means, for example, to be appointed the personal representative of an estate. Below are some very general descriptions and duties of fiduciary positions to which people or institutions are appointed in the process of the administration of an estate. There are other fiduciaries, but these roles are the most common and spawn the most questions.
Personal Representative of the Estate
The personal representative used to be called the “executor.” In general, a personal representative’s duties are to probate the will of the decedent (the person who has died). Specifically, the personal representative inventories and determines the value of the assets of the decedent’s estate, takes possession of those assets, determines the liabilities of the estate and makes arrangements when necessary for payment thereof, and administers and distributes the assets of the decedent’s estate in accordance with law, court order and the decedent’s wishes as set forth in the will. The only time there will be a personal representative is when there is a will that must be probated to settle the decedent’s estate. Typically, the “PR” is named or nominated in the will. Linked below is a more detailed description of the duties of the PR quoting various (but not all) relevant Minnesota statutory provisions.
If there is a trust in the estate plan – be it a revocable trust, an irrevocable trust, a Crummey trust, a supplemental needs trust, a special needs trust, a family trust, a marital trust, a QTIP trust, a generation-skipping trust or any other of the many kinds of trusts available to the creative estate planning attorney – that trust will have to have a trustee. Generally, the trust document appoints the trustee and perhaps an alternate or several alternates. If the trust is created by the will (a “testamentary trust”), then typically the trustee is named or appointed in the will. In general, a trustee’s duties are to administer the trust by holding, administering and distributing the assets of the trust estate in accordance with the trust agreement and applicable law. Linked below is a more detailed description of the duties and powers of a trustee using various (but not all) applicable Minnesota statutory provisions to spell out the detail.
A guardian is appointed to make personal decisions for minor children or adults who are incapacitated and unable to care for themselves (referred to legally as the “ward”). This includes determining where the ward will live and making decisions regarding medical care, education, and training for the ward, among other things. Nominating a guardian in an estate plan eliminates the need for a potentially drawn out court proceeding which can be very expensive, time-consuming, and (most importantly) exact an emotional toll on everyone involved. Once appointed, guardians must act in the best interests of the ward and comply with the obligations and duties required by the law, including filing annual reports with the court. It is also possible to temporarily delegate parenting powers to another person while a parent or guardian is still alive. Many times this tool is used in non-traditional families for convenience of travel while sharing parenting responsibilities. Nominating a standby custodian is another similar option, albeit with very different requirements. Both come with specific limitations and should be discussed in detail with an attorney.
A power of attorney is written authorization to represent or act on another’s behalf in private affairs, real estate transactions, business and or legal matters (typically not including health care decisions). The attorney-in-fact is the person to whom the grant of authority is given. . The attorney-in-fact has broad powers to act on behalf of the principal. The extent of the authority is set forth in the Power Of Attorney. A power of attorney is only valid while the principal is alive. It (and, therefore, the attorney-in-fact’s authority to act) terminates upon the death of the individual who granted it. Minnesota Statutes Section 523.21, linked below, sets out more detail of the duties of an attorney-in-fact.
Health Care Agent
In general, the duties of a health care agent, under a Health Care Directive made pursuant to Minnesota Statutes Chapter 145C, are to make health care decisions – and only health care decisions – for the principal when the principal, in the determination of the attending physician, lacks decision-making capacity to make the health care decision. The principal names a health care agent (one or more) in a written Health Care Directive. See link below.
The estate planning and probate attorneys at Sanford, Pierson, Thone & Strean, PLC have many years of estate planning and probate experience. We recognize, that many people who should have estate plans often do not because 1) they don’t like planning for their own demise, and 2) there are too many complicated and intimidating facets of estate planning and many difficult decisions to make. We will do our best to give candid advice and make the process – if not enjoyable – at least understandable and satisfying, while using our expertise to craft an estate plan to fit your circumstances.