May 14, 2009

Drafting the Key Players in Your Estate Plan

When the coach of a football team is planning for the season, he has many decisions to make, from scheduling practices to considering what plays to run. But, the first priority that must be addressed is the roster—who will the coach draft as his key players? They will determine how the coach's objectives are ultimately carried out and they will be the decisive factor in the team's performance.

Similarly, when planning for your future, you have many decisions to make as far as managing your estate during your life, and "post-season" upon your passing. As a threshold, you need to determine who you want to draft as the key players on your team—not only your attorney, or financial adviser, but also those people you will name to carry out your wishes upon your death, and who will help make decisions for you during your life, in the event you are unable.

These are among the most important decisions you will make, and in order to make the proper draft picks, you need to understand the role of each position on your team.


The position of executor involves carrying out the wishes you specify in your will. He or she will have to deal with the legal formalities involved in administering the estate of the deceased. Therefore, he or she will be called into the game immediately upon your passing. The position is important, but often thankless. You need a person who can stay organized and work well under pressure, despite coping with the loss of a friend or family member. Some of the typical plays the executor will be expected to handle include:

making funeral arrangements;gathering the assets of the estate and creating an inventory of them;paying the debts and expenses of the estate;handling tax payments and necessary tax-return filings;keeping detailed accounts of how he or she spends the money in the estate and reporting such to beneficiaries if required; anddistributing the money according to specific bequests, or gifts, made in the will (if any).


The trustee is the fiduciary (and manager) of a trust. The position of trustee involves similar duties as the executor, and therefore often times the same person is drafted to take on both positions. In fact, if your will has a "pour over" provision whereby assets are distributed pursuant to a trust, the executor will transfer those assets to the trustee for him or her to distribute accordingly, or for continued management (depending on the terms of your trust). In this way, unlike the executor, whose duties are generally over within, at most, a few years, the trustee's duties can continue for generations. In other words, the trustee could be the main player responsible for handling the majority of your estate, like your quarterback—involved in every play. The typical plays the trustee will be expected to coordinate include:

collecting trust assets;investing money;paying bills;filing accountings (quarterly or annually);managing money for the beneficiaries; andresponding to beneficiaries' requests and ensuring they are provided for according to the terms of your trust.

The trustee will have to work with the beneficiaries; he or she will consult with them about the amount of funds they need distributed, what expenses beneficiaries need paid on their behalf, and what withdrawals of the trust principal will be allowed. Therefore, as the name implies, trustworthy players are needed to fill this important role. You need someone who you trust to carry out your terms in an unbiased way; someone who is extremely responsible, and someone with whom your beneficiaries will feel comfortable.


If you have minor children on your team, you will need to draft the position of guardians. There are two types of guardians: guardian of the estate and guardian of the person. Again, one person can fulfill both positions.

Guardian of the estate is responsible for managing your children's property and assets bequeathed under your will, and held in custodial accounts. However, if your estate plan includes a trust, the trustee will be the "first string" player responsible for managing assets for any minor children held in trust. Guardian of the estate will only step in when assets are distributed out of the trust to minor children.

Guardian of the person is responsible for caring for your children in the instance both parents are unable to act (for example, providing healthcare and education). In essence, guardian of the person will step into your shoes as parent. Therefore, you should consider drafting a player who has similar qualities as you do—perhaps similar cultural or social background, a similar belief system—and someone who you believe will have a positive influence over your children's lives. In considering candidates, think about the following:

Is he or she in good health and able to handle the responsibilities associated with looking after your children?
Does he or she have the time and the money to provide your children with the kind of education and environment you prefer? Remember, this is a life-long commitment you are asking the guardian to take on.
Will he or she get along with your other family members, so that your children will stay connected with those other important team members?
If you choose different people to act as guardian of the estate and guardian of the person, make sure they will get along—the guardian of the person may need access to the funds that the guardian of the estate is managing.


The agents have two positions to fill: agent for your property, and agent for your healthcare. You can draft different agents, or have one player assume both positions. Think of the agents as a player on your "special teams" roster—they will only be called out onto the field in certain circumstances. The will act only during your lifetime, and only if you are physically and mentally unable to make financial or healthcare decisions on your own.

Your agent for property decisions will handle your financial affairs should you become incapacitated. In this way, the agent for property should have similar characteristics as the executor or trustee—responsible, and fiscally knowledgeable.

Your agent for healthcare decisions will make medical decisions for you should you become incapacitated. These decisions would include things like nursing home care, medications, surgeries and termination of life support. Again, pick someone you trust, and someone who you feel is capable of handling the pressures associated with making these tough decisions.

Once your team members have been drafted, you should keep in mind the following:

Not all of your draft picks may accept, or they may accept and then later become unavailable—name back-ups for your bench (also known as "successors").

Although you have no doubt assembled a great team, you will likely want to provide some guidance for them—keep in mind that you can provide a "playbook." The documents under which you name your players all allow you to leave specific instructions as to how you wish for each player to carry out your plans, and factors you wish for them to consider in doing so.
Over the course of the "season," circumstances may change, and you may wish to make some "trades"—remember, your team's roster is NOT permanent! Your documents can be amended at ANY time.

As the coach, you have the task of drafting the players you think best suit your "estate plan team." But, just like a professional football team needs the "general manager" to handle the logistics, you need your attorney to define, or codify, your team's operations. Preparation of proper legal documents is essential to ensure successful team performance.