I. PERSONAL REPRESENTATIVE.

A client’s personal representative is appointed under the terms of his or her Last Will and Testament and is responsible for wrapping up the client’s final affairs and ensuring that the terms of his or her Will are carried out. Upon the client’s death, all of his or her individually held assets will become the client’s estate’s assets over which the personal representative will have control. The personal representative will manage the client’s estate accounts until the estate is ready to fund the trusts created under the client’s Will.

Analogy: A personal representative is the general contractor assigned to oversee all of the tasks created by the terms of the Will. The personal representative can be either a professional or an individual.

Duties of the personal representative during the administration of an estate will include:

• Payment of any creditors’ claims against the client’s estate;
• Payment of outstanding bills due at the time of the client’s death as well as any expenses incurred in the course of administering the client’s estate;
• Filing paperwork with the Register of Wills (i.e., inventory of estate assets, accounting of estate expenses and distributions); and
• Preparation of federal estate tax, final income tax, gift tax, and generation-skipping tax returns, as required.

When all creditors’ transfer claims have been paid, all taxes have been paid, and the estate has completed the probate process with the Register of Wills, the estate’s assets will be distributed to the Trustee(s) of the various trusts created under the client’s Will. When the trusts are funded, the personal representative’s duties will be completed (except for the filing of final income tax returns) and the Trustee(s) will take control of the estate’s assets.

Generally, married individuals name their spouse as personal representative. However, a successor personal representative should be named in the event that the client’s spouse is unable to serve due to disability or in the event that the client’s spouse predeceases the client. The client’s successor representative could be a parent, sibling, or friend who would be able to manage his or her estate. In most cases, family members and friends who serve as personal representative hire an attorney to assist them with the estate administration process.

II. TRUSTEE.

The trustee is responsible for managing the assets held in trust and accepts personal responsibility and legal liability for the financial welfare of trust beneficiaries. The job can involve years of effort, coordination with lawyers and accountants, and detailed record keeping.

Typically, the trustee is named in connection with a trust for the spouse (i.e., the bypass trust and/or a marital trust) or trusts for children. The trustee can either be a professional (corporation) or an individual (e.g., family or friend).

If a client is naming an individual to serve as trustee, the client should consider carefully the trustee’s responsibilities and the prospective trustee’s qualifications and willingness to serve. If the client cannot identify an individual who could serve as a trustee, the client should consider appointing a professional trustee or co-trustee.

The following is a representative, though by no means exhaustive, summary of what is expected of a trustee. Depending upon the terms and holdings of the trust, the trustee will assume many or all of these responsibilities.

• Assumes legal responsibility for the proper administration of the trust;
• Establishes bookkeeping procedures;
• Pays bills;
• Reviews assets regularly for quality and performance;
• Makes timely and thoughtful adjustments to the portfolio;
• Schedules transactions to minimize taxation;
• Maintains detailed records of all assets and transactions;
• Files annual trust tax returns;
• Furnishes information for beneficiaries’ tax returns;
• Distributes income and principal to or for the beneficiaries;
• Arranges for the security, insurance, and maintenance of personal
• residences and other real estate owned by the trust;
• Determines final distribution in keeping with the trust agreement; and
• Arranges final transfer of assets.

III. GUARDIAN.

The guardian is the individual appointed to take custody of the client’s children if they are minors at the time of the client’s death (generally, if the client’s spouse is deceased or incapacitated).

IV. AGENT.

Under a durable power of attorney, an agent is the person appointed to manage another’s affairs if a client is disabled and thus unable to manage their own affairs. For instance, in many cases, a client will appoint his or her spouse as the agent under his or her durable power of attorney to manage his financial affairs in the event that he or she is unable to do so.

Under an advance medical directive, an agent is the person appointed to make health care decisions for the client in the event that the client becomes unable to do so. A health care agent can help make medical decisions on the client’s behalf at the end of life or any other time he or she is unable to communicate, such as if the client is severely injured in an accident.

V. NOTE.

When selecting an individual to serve as fiduciary (trustee, personal representative, guardian, or agent), a client should always select a successor in case his or her first choice is unable to serve in that role.