One of the matters you'll need to decide when you begin estate planning is who will execute your estate. Depending on the type of legal vehicles you include in your estate plan, you might also need to select people to act as power of attorney or trustee of a trust. All of these positions put other people in some control over your money, whether you are still living or not. In some cases, the power of attorney might be in control while you are incapacitated or unable to manage your own finances.
While estate planning needs are unique for each individual, some common truths tend to hold true. One of those truths is that you want someone in charge of your assets who you trust. Many people choose a close family member, and others often use their adult children in these roles.
One way you can be sure the person you are putting in charge of your money is ready for the responsibility and is likely to act according to your wishes is to go through test runs with potential candidates earlier in life. For example, you can create a trust while you are living, fund it with a limited amount of money and put an adult child in charge of the funds. You might provide some information for how the funds are to be used, such as for education, investment or to start a business.
Forbes contributor and money-management writer Brian Luster says that working with your heirs and potential trustees ahead of time helps build good stewardship habits, making it more likely they will care well for your wealth when you are gone. It also helps you identify who might be a good fit for your estate planning and administration needs. While you are working with potential candidates, you should also consider working with a professional to establish your legal estate documents.
Source: Forbes, "Why Giving Your Heirs A Test Run With Your Money Makes Sense," Brian Luster, accessed Dec. 10, 2015