Every person is unique, with a unique family situation and a unique set of concerns and desires. Because you are unique, your estate plan must be unique. Haskin Law’s attorneys craft all of your estate planning documents to fit you and only you. We do not take a “one-size fits all” approach to document selection or preparation. Nevertheless, there are certain documents that are pretty common to all estate plans. Most estate plans these days consist of a Trust Agreement, Will, Property Power of Attorney and Health Care Power of Attorney. If you are married, you and your spouse will each have your own set of these documents, including the Trust Agreement. These documents contain your directions in case you die or become incapacitated. The particular directions are very important because they are personal to you. We will work closely with you to make sure that your estate planning documents provide for your concerns and include directions that are right for you.
Just as important, though, is deciding on who you should name to carry out your directions. The people who administer your estate plan play different roles and need to possess different abilities. Here is a brief description of their roles and what you should consider in naming the people to fill those roles.
Trustee. The key estate planning document is the Trust Agreement. The most commonly used Trust Agreement is called a “living trust” or a “revocable trust” because you can change any part of it or even completely revoke it, whenever you wish. All of your assets will be transferred into the Trust. You will be the initial Trustee. Income of the Trust is reported under your individual social security number, and you can use all the assets in the Trust without any restriction – the same as if everything were just held in your name.
The provision of the Trust Agreement will specify how you want your assets distributed after your death. You can provide that the Trust hold and invest your assets so that a surviving spouse will have a lifetime income. You can provide for the care and education of your children while they are minors, and you can delay the actual distribution of their portions of your estate beyond the age of majority to a later age when they may be better able to handle an inheritance. You can also make lifetime provision for a disabled child. Just as importantly, your Trust Agreement will also contain directions for your own care during your lifetime, should you become incapacitated. In any of these cases, the Trust may operate for many years during your lifetime and after your death.
In your Trust Agreement, you will name the person or persons you want to carry out your directions when you are not able to do so, due to death or incapacity. Each of these persons is called a “Successor Trustee,” and you will want to name more than one, each to take over in case the prior Successor cannot act. The confidence that you place in your Successor Trustees is considerable, as is the responsibility which each of them will assume. Clearly, the ideal candidate should be someone whose integrity you trust without any reservation. But often, a Trustee may be subjected to differing opinions and pressures from the survivors or the competing interests of the various beneficiaries. The ability to resist pressure while maintaining the respect of your beneficiaries may be essential. Familiarity with financial matters is almost always a plus, and you should select someone who will have the time and willingness to fulfill this role. Age can also be an important consideration. In most cases, your spouse comes to mind as the first Successor, followed by an adult child or children or a trusted friend. These are obviously the least costly options. Sometimes, though, these may not be the best choices. Your particular estate situation might require professional management, or perhaps those close to you simply might not be up to the task. In either case it may be wise to consider appointing a bank trust department or similar corporate trustee to act as your Successor Trustee. Trust laws allow you to name “trust advisors” who can participate with a corporate trustee to make sure that the personal side of your wishes is taken care of. Haskin Law has extensive experience in administering trusts and estates, and can assist you in identifying the best options and the best persons for the job.
Executor. It used to be that your Will contained all the provisions for how your estate would be divided at death. As discussed above, that function has now moved to your Trust Agreement. Your Will now serves a much more limited role. When you set up the estate plan, the bulk of your assets will go into your Trust. Inevitably, though, for one reason or another, there are always some assets that do not make it into the Trust. The main purpose of your Will now is to direct that all of such assets get transferred to your Trust after your death. The only beneficiary under the Will is your Trust. The Will is often referred to as a “Pour-Over Will” because your estate assets get “poured over” to the Trust. Generally, for convenience and because the estate assets will be transferred into the Trust, the same person who is named as your Successor Trustee should be the Executor under your Will.
Guardians. As discussed above, the main purpose of your Will is to get assets into your Trust. But if you have minor children, it plays another important role. If you die leaving minor children, your spouse will be their natural Guardian, but in your Will you can nominate Guardians to take custody of your children and any separate cash or property they have (outside of your Trust) if you and your spouse both die. Here in Illinois, the law recognizes two types of Guardians, both appointed by the Court but each with completely different roles. The Guardian of the Person has custody of the children and authority to make decisions such as medical care, schooling and residence during their minority. The Guardian of the Estate handles any assets or income and any expenses of your minor child, and, unlike the Guardian of the Person, must be a resident of the State of Illinois. You may have in mind a person who can perform both roles, but the person who is best to bring your children into their home and raise them may not be the best person to handle the child’s financial affairs. It is very important to consider who would be best to perform each of these functions, both of which are critical to your children. But these functions require time, work, dedication and personal sacrifice on the part of the people appointed. You must be sure that whomever you name will be willing and able to perform the function. A frank evaluation of each person you nominate is critical. It is also wise to make sure anyone you nominate knows what to expect and is prepared to take on the commitment. Because these functions may be necessary for many years into the future, you can and should nominate Successor Guardians.
Property Power Agent. The reason for a Property Power of Attorney is to name an Agent who will have authority to handle your financial matters in the event that you are still living but are disabled, incapacitated or otherwise unable to conduct your financial affairs. The Agent will not have access to any of the assets in your Trust, but the Agent will have the power to sign your name on contracts, accounts, deeds for real estate and other financial instruments. Without such an arrangement, your family or friends might need to file a court proceeding to appoint a Guardian on your behalf. The Agent’s power terminates on your death. Because of this limit, the role of Agent is not as extensive as that of Successor Trustee, who will function after your death. In many ways, it is very similar, though, and requires similar qualifications. Because of the breadth of authority, the Agent must hold your complete Trust, and must know your personal situation and be close enough to you to understand what actions may be in your best interest. Appointing Successor Agents is usually a good idea, if you know persons who can fulfill this role.
Health Care Power Agent. The Health Care Power of Attorney comes into effect only when you are unable to make medical decisions on your own behalf due to coma, unconsciousness or similar conditions. It serves two major functions – to set forth your preferences as to approving or removing life support and to name a person, your Agent, to make that decision when you are unable to do so. The Agent should be someone who knows your wishes on these matters and who has the independence and strength to make the decision you would yourself if you were able. In life and death situations, family members can have radically different points of view and bring extreme pressure on the person in position to make the ultimate decision. Your Agent should be someone who can carry out your wishes in spite of these pressures. If possible, it is usually wise to name Successor Agents in the event that your primary Agent is unavailable.
Naming all of these persons is a crucial part of the estate planning process. The best person to select to fulfill each of these roles is unique for every estate plan. The attorneys at Haskin Law have seen many, many situations – both good and bad – as they have played out. We have experience in advising you in the proper selection.
These materials have been prepared by Haskin Law for informational and educational purposes only and do not constitute legal advice. This information is not intended to create, and receipt of it does not create, an attorney-client relationship.
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