November 2024
Q: Who are all these people mentioned in my documents?
A: Allow me to clarify:
Fiduciary – person who acts in a position of trust over another person or that person’s assets – everyone below is a particular kind of fiduciary.
Trustee – fiduciary who administers a trust and the assets owned by a trust.
Guardian – appointed by a court to administer your financial affairs or oversee your medical care and have custody of your person in the absence of an effective power of attorney.
Executor – fiduciary nominated by you in your will to execute the terms of your will, usually appointed by the Orphan’s Court/Register of Wills as Personal Representative (“PR”) unless someone demonstrates that the nominated executor has some impediment to serving as PR, such as a conviction of a crime of financial untrustworthiness (embezzlement, fraud, etc).
Personal Representative – also called “PR” – fiduciary appointed by the Court/Register of Wills to administer an estate; the Court/Register will usually appoint your nominated Executor, but not always, see above.
Agent – fiduciary to whom you delegate authority (“attourn”) over your financial or medical affairs in a document called a “power of attorney”; this person’s authority terminates when you die.
Attorney-in-Fact – synonymous with “agent” (your “attourn-ee”); this person’s authority terminates when you die.
Principal – person who delegates authority to an agent or attorney-in-fact (“attourn-or”, sort of) in a document called a “power of attorney”; this delegation of authority terminates when you die.
Q: Should I make my estate the beneficiary of my insurance so my PR can pay my funeral bill?
A. No! By the time your PR receives the insurance, your funeral will have to have already been paid from other assets, either your assets or someone else’s money loaned to the estate or advanced for the payment of your funeral expenses. It can take months to secure the insurance proceeds. If you trust a loved one to use the insurance proceeds properly, make that person your beneficiary and they can pay the funeral bill or assign the policy to the funeral home. Or prepay your funeral – that can save your loved ones money and gives you control of your departure from this life.
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Attorney Tim Barkley
The Tim Barkley Law Offices
One Park Avenue
P.O. Box 1136
Mount Airy
Maryland 21771
(301) 829-3778
Wills & Trusts | Estate Planning | Probates & Estates
Elder Law | Real Estate | Business Planning