Selecting someone to handle your finances, estate or medical decisions may be one of the most important — and overlooked — parts of financial planning.
The decision affects not just how assets are managed and distributed, but also how smoothly your affairs are handled during periods of incapacity or after death. And as families become more complex, the choice is often far from straightforward.
In an interview, Harry Margolis, author of “Get Your Ducks in a Row,” said many people underestimate the difficulty of naming the right person for roles such as executor, trustee, and power of attorney. The responsibilities differ significantly, and the wrong choice can create friction, delays, or even conflict.
Below is a transcript of that interview, edited for clarity and brevity.
Choosing the right people for executor, trustee, and power of attorney
Robert Powell: Many people want help choosing the right person to serve as their executor, trustee, or power of attorney. To walk us through that decision, I’m joined by Harry Margolis, author of “Get Your Ducks in a Row.” Harry, welcome.
Harry Margolis: Good to see you again.
When the choice is straightforward — and when it’s not
Harry Margolis: These are different roles, and people’s situations vary. For some, the choice is straightforward. You might name your spouse, and if you have one or two children you trust, you may name them either initially or as alternates to fill all the roles.
But it can be more complicated. If you’re unmarried, don’t have children, or have children who may not be suited for the role, the decision becomes harder. A common issue is family dynamics. If children don’t get along, naming them together may not work. Naming one and not the others can also create tension.
If you don’t have obvious candidates, you can look outside the immediate family. That might include an attorney, a relative such as a cousin or sibling, or another trusted individual.
Using professionals and co-fiduciaries
Harry Margolis: Estate planning attorneys are often willing to serve as power of attorney and even more likely to serve as trustee. In some cases, they may also serve as executor, sometimes referred to as a personal representative.
Often, professionals serve alongside a family member as co-trustee or co-executor. That combination can work well. You have someone who understands the family and someone with professional expertise to ensure everything is handled properly.
This approach is particularly helpful if you’re asking a relative, such as a niece or nephew, who may be willing to participate but not take on the full responsibility alone.
Why health care decisions are different
Harry Margolis: Appointing someone for a health care proxy or health care power of attorney can be more challenging. Attorneys and other professionals typically don’t want to be involved in personal medical decisions.
If you don’t have a family member to name, people sometimes choose close friends. In some cases, friends serve in that role for each other. But that can become more difficult over time as people age, develop health issues or pass away.
Understanding the roles and responsibilities
Robert Powell: The roles and duties of an executor differ from those of a trustee or power of attorney.
Harry Margolis: That’s right.
A power of attorney is often a standby role. It may never be used, but if it is, it typically arises due to incapacity and can involve significant responsibility, though usually not for many years.
The executor, or personal representative, has an intense but relatively short-term role. After someone dies, there’s a great deal to do — dealing with probate, managing finances, paying final bills, distributing assets and handling property matters. Ideally, this is completed within about a year.
The trustee role is different. It tends to be less intense but more ongoing. It can last for years or even decades, depending on the terms of the trust and the needs of the beneficiaries.
Matching the person to the role
Robert Powell: It may make sense to appoint different people for different roles, depending on their skills, location and willingness.
Harry Margolis: Exactly. You might name a child as power of attorney because they are nearby and can step in when needed. But that same person may not be the right choice for the more demanding responsibilities of probate or the long-term commitment of a trustee.
Availability is also important. Each role has different demands, and not everyone is suited for all of them.
How to evaluate potential candidates
Robert Powell: Is there a checklist people can use to evaluate whether someone is right for these roles?
Harry Margolis: There isn’t a formal checklist, but you usually know the person. You know whether they’re reliable, whether they follow through and whether they’re good with money.
For trustees, there’s an opportunity to test the relationship. If you already have a trust, you can name someone as co-trustee and work with them. That gives both of you a chance to see if it’s a good fit. If it’s not, you can make a change.
Working together also helps ensure that if they eventually take over, they understand your intentions.
Final thoughts
Harry Margolis: Ultimately, you should choose someone you trust and feel comfortable with in these roles.
Related: The inheritance mistake that can tear families apart
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