The Caton Law Firm PLLC
206 S. Tennessee, PO Box 387 McKinney, TX 75070 - Phone.972.562.0777 - Fax.972.562.0780










Current Events and General Client Memos

FIDUCIARIES APPOINTED IN ESTATE PLANNING DOCUMENTS

REMEMBER, THE NUMBER ONE QUALIFICATION FOR ALL FIDUCIARIES YOU APPOINT IS TRUSTWORTHINESS.

EXECUTOR. It is the Executor's duty to administer the Decedent's Estate. This includes making sure that the probate process is properly completed, making sure that the Decedent's final federal individual income tax return is filed and the income taxes paid, making sure that all debts owned by the Decedent are paid and that all claims against the Decedent (or his Estate) are handled, keeping the Decedent's assets safe and properly invested during the estate administration period, handling any lawsuits and title disputes involving the Decedent, his Estate or his assets, filing a federal estate tax return and a Texas Inheritance Tax return, if required for the Decedent's Estate, and paying any federal estate and Texas inheritance taxes due, filing federal income tax returns for the Decedent's Estate during the administration period (and a final Estate income tax return when the Estate is closed), making partial distributions of the Estate to the beneficiaries during the administration period, closing the Estate when all of the administration matters have been completely finished, and then distributing the Estate to the beneficiaries according to the terms of the Decedent's Will. If trusts are created in the Decedent's Will, it is the Executor's duty to set up the trusts and to fund them properly. At that point, the Trustee takes over the administration of the trust(s). You may appoint Co-Executors to act (no more than three (3) at one time – even two (2) can be impractical sometimes). If you appoint a Sole Executor, you should also designate one (1) or two (2) alternate Executors.

TRUSTEE. The Trustee's primary duty is to administer the trust created by the Trustor/Testator in accordance with its terms (and applicable law). The Trustee must make sure that at all times the trust assets are invested prudently (considering both the production of income and safety and growth of principal and related tax objectives), that the trust assets are protected from loss (e.g., appropriate insurance is maintained where applicable), that good records of all transactions involving the trust are kept (e.g., receipts and disbursements), that distributions are made to the trust beneficiaries as directed by the trust instrument, that federal income tax returns for the trust are filed each year, and that any other matter involving the trust is properly considered and handled. When the trust terminates (by its terms), the Trustee must distribute the trust assets to the proper beneficiaries, according to the terms of the trust (the distribution might even be to the Trustee of yet another trust), and a final federal income tax return for the trust must be filed. It is not unusual to have Co-Trustees (no more than three(3) at one time) or a single Trustee, followed by one (1) or two (2) successor Trustees. Obviously having just one (1) fiduciary act is simpler and more practical; however, sometimes having two (2) or more provides checks and balances.

GUARDIAN OF THE PERSON. The Guardian of the person acts on behalf of a minor (person under age 18) or incapacitated person (of any age). The Guardian of a minor is usually the person with whom the minor will live. Generally, parents appointing a Guardian for their minor child should try to select someone who will raise their child in a manner similar to what they themselves would have done. The Guardian is responsible for seeing to it that the minor is properly educated and trained in a manner that will lead to a productive life. The Guardian is also responsible for the moral upbringing of the minor child. The Guardian may handle some money belonging to the minor, such as a monthly distribution check received from the Trustee administering a trust for the benefit of the child, but the bulk of the child's estate is handled by the Trustee. The Guardian does have a duty to keep records, in general, of what has been expended on behalf of the child. Co-Guardians may be appointed, but they must be husband and wife.

AGENT UNDER A FINANCIAL POWER OF ATTORNEY. Your financial attorney in fact (agent) has the duty of handling all of your financial affairs and assets in the event you become incapacitated. This person must be someone to whom you would feel completely comfortable giving a blank check. In addition to scrupulous integrity and honesty, you want this person to be a prudent money manager.

AGENT UNDER A HEALTH CARE POWER OF ATTORNEY. Your health care agent has the duty of making medical decisions for you if you are ever unable to make or communicate a health care decision (e.g., in the advanced stages of Alzheimer's disease or in a coma). You should discuss with this person your wishes in regard to life support systems, feeding tubes, types of operations and medications, etc. This person is supposed to make decisions that are in your best interests, based on their knowledge of what you would have decided if you had been able to make the decision.