Key Roles in an Estate Plan and How to Pick the Right People

Estate planning can feel like a big, uncomfortable topic. There are a lot of decisions to make, and it’s completely normal to feel overwhelmed when you first begin the process. But taking it step by step can make things much more manageable.

One of the most important steps is choosing the right people to fill the key roles within your estate plan, since these individuals will be responsible for carrying out your wishes and supporting your loved ones.

Identifying these roles ahead of time can bring peace of mind to you and help reduce stress or potential conflict for your loved ones down the road. In this blog, we’ll walk through five essential roles in an estate plan and break down what each role actually is responsible for.

Beneficiary

A Beneficiary is someone named in a Will or Trust who is legally entitled to receive benefits from an estate once an individual has died.

What to expect if you are a Beneficiary:

• You will receive your entitlement when and how it is stated in a Will or Trust

• You can expect the Executor to act in your best interest regarding the estate

• You have the right to request information from the Executor or Trustee regarding the administration of the estate

In most cases, Beneficiaries have little responsibility other than receiving the assets that have been assigned to you in the will or trust.

Executor

An Executor of a Will is the person whose primary responsibility is to carry out the instructions and wishes left in a Will.

Being the Executor comes with many responsibilities and can depend greatly on the details of the estate, but some of the larger duties include:

• File the Will with the court and begin the probate process

• Notify life insurance companies, Beneficiaries, Social Security, and Medicare of the death

• Ensure minors and pets are taken care of with their respective Guardians (assuming it is identified in the Will)

• Keep an eye on the home or other properties, pay incoming bills, and handle any business affairs as needed.

• Gather all essential documents

• Begin making final arrangements outlined in the Estate Plan

• Set up an estate account to hold all the deceased’s assets

If an Executor is not appointed, the courts will determine who should fill that role, which could lead to delays and undue stress for your loved ones.

Guardian

A Guardian is a person who is granted legal authority (and responsibility) of any dependents of the deceased individual – including minor children and pets. Guardians are responsible for providing food, clothing, shelter, education and other needs for dependents. They also have the authority to make healthcare decisions.

Guardians also have the responsibility to:

• Receive and manage money to use for the care and support of the minor

• Act in the best financial interest of the minor

• Remain conscientious of how money is being spent; keep explicit records of all spending

• File a yearly report with the court

Power of Attorney

A Power of Attorney (POA) allows one person (the agent or attorney in fact) to make decisions and act on behalf of another person (the principal). The specific powers vary and are outlined in the POA document.

Your duties may vary depending on the type of POA and the principal’s health. A Durable POA remains in effect even if the principal becomes physically or mentally incapacitated. Without the “durable” designation, your authority would end if the principal became incapacitated due to illness or at death.

Responsibilities should be clearly defined in the POA document, but may require the following:

• Manage the principal’s finances

• Access bank accounts

• Make insurance-related decisions

• Hold estate documents

• File tax returns

• Sign real estate documents

• Keep detailed records of all financial activity (including receipts for bills, documentation of assets sold or income received)

• Track your own expenses if you expect reimbursement (gas receipts, mileage, etc.)

Trustee

Similar to an Executor of a Will, a Trustee is the person who is legally appointed to manage and protect the property and assets held within a Trust. In simple terms, the Trustee has legal authority over the assets inside the Trust, but only for the purpose of carrying out the Trust’s instructions, not for their own benefit.

The primary responsibilities of a Trustee are:

• Distributing assets to beneficiaries per the terms of the Trust

• Ensuring all required tax filings related to the Trust are complete

• Managing and investing trust assets prudently

One way to streamline estate planning is to appoint the same person as the Trustee (manages assets in a Trust) and the Executor (administers the Will through probate). While this is a lot of responsibility, this can help ensure consistent management of assets, as well as reduce costs.

Assigning roles and finalizing your plan

Assigning roles within your Estate Plan is not something that should be taken lightly. Once you have an idea of who you’d like for each role, sit down with those people and talk through all responsibilities and implications. If you find during those conversations that someone isn’t willing or able to fulfil those responsibilities, find someone else who will.

Yearly checks of your estate plan can help make sure roles are assigned to the best suited individuals and your legacy reflects your current wishes.

Whether you’re creating an estate plan from scratch or reviewing one you put in place years ago, we’re here to help you think through the details as part of your overall financial plan. Our knowledgeable team is happy to help support you and your family through this journey. Connect with one of our Advisers to start the conversation.

The estate planning information offered by the advisor is general in nature. It is provided for informational purposes only and should not be construed as legal advice. Always consult an attorney regarding your specific legal situation.