Here’s the secret to being a successful agent under an estate planning document: Treat it like a second job. You might as well, because as an agent you will end up spending at least as much time as you do for your day job, only with more stress and financial risk.
If this sounds attractive, then read on for a short description of the most common agent jobs.
Trustee: You will administer a written trust for the benefit of the named beneficiaries. Your duties are spelled out in the trust document and will likely include managing and investing the trust assets and making distributions to the beneficiaries. You should be organized, financially savvy, a good communicator and know when to hire professional advisers.
Your duties begin when the trust is signed and funded with assets. You should, but are not required to, hire an attorney to advise you. You most likely will be entitled to payment for your services. You must keep detailed records of your actions. You can resign at any time. The trust document may set out reasons you can be removed as trustee. A court can also remove you as trustee for good cause.
Executor/Administrator: You will administer the decedent’s probate estate. Your duties are spelled out by the decedent’s will (if there is one), by court order and by statute. You should be organized, knowledgeable about handling assets and debts and a good communicator. You are entitled by statute to be compensated with court approval unless the decedent’s will provides otherwise. You must have an attorney represent you in court. Your duties begin when you are appointed by a court order. You must keep detailed records of your actions. The court can remove you at any time. You can only quit with court approval.
Financial Power of Attorney Agent: You will handle the principal’s financial affairs. You have only the powers that are specifically given to you in the Financial Power of Attorney document. Your duties begin when stated in the document. You should be organized and knowledgeable about handling assets and debts. You must keep detailed records of your actions. You are not required to hire an attorney to advise you, but it is a good idea to consult with one about your duties and liabilities. You can resign at any time. The principal can fire you or revoke the POA at any time. A court can suspend the power of attorney or remove you as agent at any time. You are entitled to compensation unless the document states otherwise.
Medical Power of Attorney Agent: You will make medical decisions for the principal only if he is unable to make his own decisions. You are required to make the same medical decision that the principal would have made for himself had he been competent. You should know the principal’s wishes, be familiar with the principal’s medical history, have at least general knowledge about medical terms and medical insurance, and be willing to advocate for the principal. You can resign at any time. The principal can fire you or revoke the medical power of attorney document at any time. A court can suspend the power of attorney of remove you as agent at any time. You will likely not be compensated.
Serving as an agent is hard. You may be personally sued or criminally prosecuted if you get it wrong. Don’t accept the job of agent unless you have the time, skills and knowledge to get it right.
Virginia Hammerle is president of Hammerle Finley Law Firm and board-certified by the Texas Board of Legal Specialization in civil trial law. To receive her newsletter, email email@example.com or visit hammerle.com. This column does not constitute legal advice.