What Does Executor Trustee Guardian Do?
What do Executor Trustee Guardian have in common? This is a common question that I get from new parents interested in doing estate planning after the birth of their child. They are all fiduciaries. A fiduciary is a person or an entity designated to act in your best interest. Each one of these fiduciaries has its own distinct role.
What is the Difference between Executor Trustee Guardian?
An Executor is someone you name in your Will to be the “general manager” so to speak, to “run the show” and make sure, upon your death, your estate is handled properly and your assets are distributed the way you want. The Executor must act in the best interest of the deceased individual and the beneficiaries of your estate. Examples of tasks an Executor will need to handle include:
- filing your Will with the probate court,
- handling the probate proceeding by communicating with the Court and notifying the required family, beneficiaries and creditors of your passing and about the existence of the Will,
- collecting your probate assets into an Estate account,
- paying your remaining bills, and
- distributing your assets as outlined in your Will.
A Trustee is someone who manages another person’s property for the benefit of the creator of the trust or for the benefit of the beneficiaries. The Trustee also has a duty to act in the best interests of the beneficiaries.
A Trustee can be in charge of assets placed into a Trust either during your lifetime or upon your death. Usually, you will choose the Trustee. If you execute a lifetime Trust, sometimes you can be the initial trustee and designate a Successor Trustee to act if you are not able. Othertimes, as with Irrevocable Medicaid Trust, you will designate someone else to be the initial Trustee and he/she will act immediately. A Trustee in these circumstances may act during your lifetime. When a trustee starts to act in these circumstances, it is immediate, without Court involvement. If you leave assets in your Will to someone with trust provisions, commonly referred to as a Testamentary Trust, you will name a Trustee within the Will, to manage those particular assets for those particular individuals. In these instances, the Trustee only begins to manage the assets governed by the Trust, upon your death, and only after being officially appointed by the Court.
Examples of tasks a Trustee may handle include:
- managing the assets funded (transferred) into the trust,
- safeguarding the assets,
- keeping records,
- filing taxes and
- distributing income and assets to beneficiaries as delineated within the terms of the trust agreement.
A Guardian is someone who is charged with taking care of someone else when they are unable to do so themselves. This may be an older or elderly person or a minor. In the case of an older person, the Guardian will remain as Guardian until the individual is no longer incapacitated or until the person’s death. In the case of a minor, the Guardian would act until the minor becomes the age of majority.
Why Do We Need to Appoint Different Fiduciaries?
The terminology references the different roles necessary for different tasks. When appointing a fiduciary you can appoint the same individual as Executor, Trustee, and Guardian. Alternatively, you may feel that one person is better at handling money and better suited to be appointed as your Executor or Trustee and another person is better suited to handle personal needs matters as they may be more caring or comforting to the incapacitated person or minor.
What if I Don’t Appoint Executor Trustee Guardian?
If you don’t appoint an Executor, Trustee, or Guardian, or if you appoint someone who is no longer able to act because they have become incapacitated, don’t want to act or predecease you, you can petition a Court for the appointment of a fiduciary for you. Typically, in Surrogate’s Court, the Court will not choose a person for you. The Court will want you to propose somebody to serve as the Executor, Trustee, Guardian. The Court will generally appoint who you choose unless that person is eligible pursuant to SCPA 707.
How Do I Choose An Executor Trustee Guardian?
An Executor, Trustee and Guardian are all people that you can choose. You should designate someone that you trust and someone who is responsible. An executor is the person who you believe can coral and safeguard all of the assets quickly. A Trustee gets more involved with managing finances so they should have experience with managing finances and with investment. The Guardian may handle personal and medical affairs as well as financial affairs.
Since a Guardian is tasked with taking care of you or your loved ones you will want them to be familiar with your desires and lifestyle.
We can help you plan your estate and choose the right Executor, Trustee, Guardian to get your job done.
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