Some people might deem estate planning as a complicated procedure as it necessitates the use of confusing legal terms and documents. The extreme involvement of complex jargon related to law can make it quite difficult for most people to grasp how the entire process actually works.
Therefore, we have prepared this mini-guide to assist you in preparing a will or establishing an estate plan for your children. We hope that this article will help clarify the differences between some of the most-commonly used terms in legal processes; testamentary guardians, trustees and executors. Here is a detailed explanation of the differences between each role and their responsibilities:
A testamentary guardian is someone who is named in a legal will that is to act as a guardian and render assistance to minor or disabled adult children. If you are a parent to a disabled or minor child, it is highly recommended to appoint a testamentary guardian in your legal will.
In the event of your death, the nominated testamentary guardian will be assigned with the responsibility of your children. They will also be responsible to take care of other matters such as addressing their healthcare and medical requirements, and educational and financial needs until they reach the age of 18.
When a couple prepares a will, each spouse typically designates the other as the guardian of their children. While this is usually true for married couples, it is also fairly common when it comes to the divorced ones. However, every case is different and each individual tailors their will according to their personal circumstances.
The important thing is that you nominate a reliable guardian for your dear children. If you fail to do the necessary, the court will take over that responsibility without the input of any of your wishes or being familiar with any of your friends, family and most importantly, your children.
Furthermore, the testamentary guardian is also required to contact the trustee(s) and the executor to see that any and all estate properties that legally belong to the children and all estate managed by the custodian are taken care of and distributed properly.
When people plan their wills, they often establish a trust as well. These trusts are known as testamentary trusts. They are created for the trust-maker’s beneficiaries. Typically, the testator i.e. the individual that is establishing the will puts certain properties or portion of the assets in the trust.
The Executor is then responsible for distributing the remaining estate assets after making all expense, tax, debt and any particular bequest-payments to the appointed trustee. The trustee can be a trust organization, bank or any individual that is nominated by the testator. They are required manage and handle the trust. It is essential that the trustee does so by following the particular rules and regulations of the process.
The main confusion arises between the roles of an executor and a trustee. The executor is required to keep a check on the sum total of the entire assets present in an estate, including those that are set aside to be put in the trust. The role of an executor ends after the settlement of an estate (explained below). However, the role of a trustee still continues as they need to manage the assets put in that trust until the trust period ends.
An executor is an individual appointed by the testator or an establisher of a will. In the former case, an executor is assigned to carry out the specific instructions stated in a legal will. Typically, they are responsible for sending the will forward for probate, however, it isn’t mandatory for the executor to perform this action.
The main duties of an executor includes obtaining important information regarding any potential heirs, rejecting or approving the claims of the creditor, gathering and carrying out any necessary debt payments and distributing assets to the beneficiaries of a will.
They need to ensure that estate taxes are worked out, all the taxes air paid and important forms are filed. They also provide assistance regarding the estate to the involved attorney. Moreover, the executor plays the role of a legal conveyor and makes decision using the information in bequests. They decide where the donations will be directed to; whether they be donated to a charity organizations or other facilities.
We hope that all the aforementioned information about guardians, trustees and executors was worth your while. If you are still unsure about how to go about the process, hire an estate planning lawyer who can help you secure your valuable assets using the right methods!