Actually, when you practice if you can think about it, try to keep your wrist straight in all directions...but RELAXED. your index finger could roughly align with your bone in your forearm. But , again, don't do this to the point of stiffening your arm. The most important thing in fingerpicking is to stay relaxed...in your fingers, in your arm and in your wrist. When you pick, bend your fingers at the largest knuckles (at the hand, not the middle of your fingers) This provides more control and strength over the long run. As far as the wrist, try not to hyperextend it, other than that...just stay relaxed. Hope this helps. Look at these pics and maybe they'll help you out. But remember, tension is bad.
http://www.theguitarsuite.com/rthandposition.html
Adam