New parent? Expecting? Important Roles to Consider

When creating a will for the parents of children, there are three separate roles to consider. Each role is distinct in its significance, skillset, and responsibilities. You may have a person in your life who would be appropriate to appoint in all three roles, or you may wish to appoint different people for each. There are advantages and disadvantages to both. This is an overview of the three roles, which is helpful for parents or parents-to-be when first starting to think about their estate planning.

 (1) Executor

An executor is responsible for the management of the deceased person’s estate and follows the directions left in the will. Executors serve as fiduciaries and, therefore, have the duty to act in financial good faith and in the estate’s best interests.

Once the executor is appointed by the probate court, that individual will take the estate through the probate process. Once finalized through the probate court system, the executor will distribute the estate to its beneficiaries. They are also responsible for filing tax returns and paying any income or estate taxes.

The selected executor should be 18 years old, diligent, and reliable. They should be someone you trust to handle personal and financial matters pursuant to the will. The role of the executor can be overwhelming and time-consuming.  It is also an option to appoint an attorney to handle the administration of the estate at a cost, although since most executors hire attorneys anyway, the additional cost may not be all that much.

Most people wish to appoint someone younger than them in this role, and while it is certainly a good idea to have an alternate who is younger, when making this decision, the most important question is: “If someone needed to step in tomorrow, who would I want it to be?” Most often, a spouse is listed first, followed by a parent, an adult child, another relative, or a trusted friend. The time frame of this role can be considerably shorter compared to the guardian and trustee roles.

 (2) Children’s Trustee

A trustee(s) may be appointed to make financial decisions regarding the ongoing management of a beneficiary’s inheritance. They must act in the best interest of the beneficiaries as fiduciaries. A trustee can be a friend or family member with the willingness and ability to take on such a responsibility.  It is also an option to appoint an attorney to handle the management of the trust at a cost.

The trustee makes financial decisions about the management of any funds held in trust for the beneficiary, ensuring all the parameters outlined in the will are followed.  Other responsibilities may include paying bills, managing investments, and applying for benefits on the beneficiary’s behalf.

The primary difference between an executor and a trustee is that the executor manages the estate through the end of probate, while the trustee deals with the ongoing management of a child’s inheritance until at least age 18 (but often longer, as this can be customized in the will).

As the time frame can be quite long, it is important to appoint alternates or give them the ability to appoint a replacement trustee.

(3) Guardian

The person or persons designated as the guardian are the ones responsible for your child’s well-being. This includes all personal decisions and caring for them. The guardian(s) ensure that the needs of the child are met.  The Guardian has the legal authority to make day-to-day decisions for them, including where they can live. It is important to appoint someone who you trust to make decisions in a way similar to what you would do.

Importantly, you are only nominating the Guardian; they still need to be appointed by a court order.  For this reason, you should be sure the person you name as the guardian is aware of their appointment so that they can act timely and quickly get advice at the time they are needed as to what legal steps should be taken. If there are multiple guardians and a disagreement arises over how they should act, the court can determine who has the authority to make certain decisions.

If the parents are separated but share custody, the person you name as your guardian in the will is only able to act if the other parent is not able to act as guardian due to incapacity or death.  Your will cannot override the existing guardianship rights of the other parent.

All three roles are significant. Deciding who to appoint in each role can be stressful. But understanding what each role entails can help in this decision process, as every situation is different.

Disclaimer: The information provided in this blog post is for general informational purposes only and should not be considered legal advice. For specific legal advice, please consult a qualified professional.