How to Choose the Right Person to Manage Your Estate

Creating an estate plan involves more than deciding who will receive your property. You must also decide who will have the authority and responsibility to carry out your wishes.

Many people automatically name a spouse, adult child, or closest relative without considering whether that person is actually suited for the role. Others assume that the same person must serve in every position.

The right choice depends on the responsibilities involved, the complexity of your assets, and your family dynamics.

First, Understand the Different Roles

Your estate plan may name several different decision-makers. Although one person can sometimes serve in multiple capacities, each position has a distinct purpose.

Personal Representative

Your personal representative is the person nominated in your Last Will and Testament to administer your probate estate after your death. This person is sometimes called an “executor” in other states.

The personal representative may be responsible for:

• Locating and protecting estate assets;

• Working with the probate attorney;

• Identifying and notifying beneficiaries;

• Addressing creditor claims;

• Paying proper expenses and taxes;

• Selling or managing estate property;

• Maintaining financial records; and

• Distributing the remaining assets in accordance with the will and applicable law.

Even when a will nominates someone, that person must still be appointed by the probate court.

Florida also imposes specific eligibility requirements. A Florida resident who is legally competent may generally qualify, subject to certain statutory restrictions. A nonresident may qualify only if the person falls within one of the permitted familial relationships identified by Florida law. Florida Statutes §§ 733.302–733.304.

Before naming someone who lives outside Florida, confirm that the person is legally eligible to serve.

Successor Trustee

If you create a revocable living trust, you will generally serve as the initial trustee while you are alive and able to manage your affairs. Your successor trustee takes over upon your incapacity or death, as provided in the trust.

Depending on the terms of the trust, the successor trustee may need to:

• Locate and protect trust assets;

• Manage real estate or business interests;

• Pay expenses and obligations;

• Invest trust property;

• Maintain records;

• Provide information or accountings to beneficiaries;

• Make discretionary distributions; and

• Continue managing assets for children or other beneficiaries over several years.

A trustee owes fiduciary duties to the trust and its beneficiaries. Florida law requires trustees to administer trusts in good faith, act loyally, remain impartial when multiple beneficiaries are involved, and manage trust property prudently. Florida Trust Code, Chapter 736, Part VIII.

This role may require a longer commitment than serving as personal representative, particularly when a trust continues for minor children or beneficiaries receiving distributions at different ages.

Agent Under a Durable Power of Attorney

An agent under a durable power of attorney manages financial and legal matters during your lifetime. The agent’s authority ends when you die.

Depending on the authority granted in the document, your agent may be able to:

• Access and manage financial accounts;

• Pay bills;

• Handle real estate matters;

• Communicate with financial institutions;

• Operate or manage a business;

• Address tax matters; and

• Assist with financial decisions during incapacity.

An agent under a Florida power of attorney is a fiduciary and must act in good faith, within the authority granted, and in accordance with the principal’s reasonable expectations or best interests. Florida Statutes § 709.2114.

Because a power of attorney may give someone significant access to your property, trustworthiness is essential.

Trustworthiness Should Come Before Family Hierarchy

Many parents automatically name their oldest child. Others choose the relative who lives closest or the person who might feel offended if someone else were selected.

Those considerations should not control the decision.

The person managing your estate may have access to bank accounts, confidential records, real estate, business interests, and valuable personal property. That person may also need to make decisions affecting multiple beneficiaries.

The most important question is not, “Who expects to be chosen?”

It is, “Who can be trusted to follow my instructions, keep accurate records, and place the beneficiaries’ interests ahead of their own?”

Consider the Person’s Organization and Follow-Through

A good fiduciary does not need to be an attorney, accountant, or financial advisor. However, the person should be responsible enough to:

• Respond to communications promptly;

• Keep documents and financial records organized;

• Meet deadlines;

• Ask for professional assistance when needed;

• Avoid mixing estate or trust assets with personal funds; and

• Follow instructions even when the process becomes inconvenient.

Someone may be loving, intelligent, and well-intentioned but still be a poor fit if that person routinely avoids paperwork, misses deadlines, or becomes overwhelmed by financial matters.

Think About Family Dynamics

Administering an estate is not purely administrative. The person you select may need to communicate difficult decisions, manage disagreements, and explain why certain distributions cannot be made immediately.

Consider whether your proposed fiduciary can remain calm and neutral when dealing with:

• Sibling disagreements;

• Unequal inheritances;

• A beneficiary who wants money immediately;

• Disputes over personal property;

• The sale of a family home;

• Loans or prior financial assistance involving a beneficiary; or

• Ongoing trusts for children or vulnerable beneficiaries.

Naming one child to manage assets for another child may work well in some families. In others, it may create resentment or place the selected child in an unfair position.

The person who keeps the peace during family gatherings may not necessarily be the person who can enforce the terms of your estate plan.

Consider the Complexity of Your Assets

The right person for a relatively simple estate may not be the right person for an estate involving:

• Multiple properties;

• Rental real estate;

• A closely held business;

• Assets located in different states;

• Complex investments;

• Significant debt;

• Minor beneficiaries;

• A beneficiary with special needs; or

• Trusts that will continue for many years.

If your estate includes a business, for example, you should consider whether the person selected understands the business or can work effectively with those who do. A fiduciary who delays payroll, insurance, licensing, or operational decisions could reduce the value of the business before it is transferred or sold.

For more complex estates, a professional or corporate fiduciary may be appropriate. Professional administration involves fees, but it may offer experience, continuity, neutrality, and established procedures for managing assets and beneficiary requests.

One Person Does Not Have to Fill Every Role

Your best financial decision-maker may not be the best person to manage a long-term trust. Likewise, the person you trust to handle your finances during incapacity may not be the best choice to resolve family issues after your death.

You may name different individuals to serve as:

• Personal representative;

• Successor trustee;

• Agent under your durable power of attorney; and

• Health care surrogate.

Separating the roles can allow you to choose each person based on their particular strengths.

However, naming different people also requires coordination. Your estate plan should clearly describe each person’s authority and reduce the potential for conflicting decisions.

Be Careful When Naming Co-Fiduciaries

Naming two people together may seem like a fair solution, especially when there are multiple children. However, co-fiduciaries can create practical difficulties.

Potential problems include:

• Delays obtaining both signatures;

• Disagreements over investments or distributions;

• Confusion regarding responsibilities;

• Increased administrative expenses; and

• Deadlock when the co-fiduciaries cannot agree.

Co-fiduciaries may be appropriate when the individuals communicate well and offer complementary skills. They should not be selected solely to avoid hurting someone’s feelings.

If you want more than one person involved, the governing documents should address whether the fiduciaries can act independently, must act unanimously, or may act by majority decision.

Always Name at Least One Backup

Your first choice may die, become incapacitated, move away, decline to serve, or become legally ineligible.

For that reason, your estate plan should name at least one alternate for each important role. Complex or long-term trusts may require additional succession planning.

Without an available successor, a court may need to appoint someone you did not select.

Speak With the Person Before Naming Them

Serving as a fiduciary can require considerable time and emotional energy. The person may need to work with attorneys, accountants, financial advisors, beneficiaries, banks, and governmental agencies.

Before finalizing your documents, speak with the proposed fiduciary about:

• The role you want the person to accept;

• The general nature of your assets;

• Your family circumstances;

• Any continuing trusts or special distribution instructions;

• Where important documents will be located; and

• Whether the person is genuinely willing to serve.

The conversation does not need to disclose every detail of your estate plan. However, the proposed fiduciary should understand the general responsibility involved.

Review Your Choices as Circumstances Change

The person who was the right choice five or ten years ago may no longer be appropriate.

Review your appointments after significant events, including:

• Marriage or divorce;

• The birth or adoption of a child;

• A fiduciary’s death or incapacity;

• A change in family relationships;

• Relocation to another state;

• The purchase or sale of a business;

• A significant increase in wealth; or

• Changes in a proposed fiduciary’s financial or personal circumstances.

An estate plan should evolve with your life.

The Bottom Line

Choosing the people who will manage your affairs is one of the most important parts of estate planning.

The best choice is not always the oldest child, the closest relative, or the person who lives nearby. Your fiduciaries should be trustworthy, organized, emotionally capable, and willing to seek professional guidance when necessary.

A thoughtfully selected fiduciary can help make the administration of your estate more efficient, preserve family relationships, and ensure that your wishes are properly carried out.

If you are creating or updating your Florida estate plan, an estate-planning attorney can help you understand the responsibilities associated with each role, confirm that your proposed fiduciaries are legally eligible, and structure the documents to reduce future conflict.

This article is for general informational purposes only and does not constitute legal advice. Every estate plan is different, and you should consult with an attorney regarding your particular circumstances.