If your estate plan were a movie, who would you cast in the supporting roles? First, there should be an attorney, the skilled estate planning professional who knows California probate and tax law and who can come up with all kinds of strategies to maximize what your heirs and beneficiaries will receive.
Next, you would need a personal representative or executor. This is the person who will shepherd your estate through probate, making sure your final bills are paid and your bequests distributed. This person may play another role if you are incapacitated at any time before you die: your agent, or surrogate, appointed in your health care advance directive and durable power of attorney.
And, of course, if you decide to establish a trust, you would need a trustee. California law has fairly specific expectations of trustees, so you would need to cast this role carefully. You need a person who can maintain control over and safeguard the trust property. Part of protecting the trust is investing assets prudently, so it should be someone with a good head on her or his shoulders.
The trustee must also provide an accounting to the trust beneficiaries. The accounting looks a lot like a balance sheet — it needs to include all assets, expenses, debts and distributions. And, speaking of distributions, the trustee must carefully follow the instructions in the trust documents when it comes to distributing trust assets to the beneficiaries.
All of this requires the trustee to maintain a delicate balance of devotion to the beneficiaries while remaining impartial. That devotion means that the trustee has a duty to administer the trust with the best interests of the beneficiaries in mind. That devotion means that the trustee cannot act in his or her own interests. There is no self-dealing in trust administration.
Look back at the list of who could be the attorney, because this person is integral to the entire process. All of these characters will need solid legal support as they discharge their duties. And when it comes to trusts, especially large and complicated trusts, the attorney may be the best choice to act as trustee.
There are other roles that we may discuss in a future post. Right now, we are thinking about who could possibly be that experienced attorney, that learned adviser, that trustworthy trustee.
I am happy to answer any questions you have about trusts and estate planning. Feel free to contact me for more information about how all of this works here in California.