Executors, Trustees, and Guardians - Who Does What and Why
ExecutorThe person responsible for winding up your earthly business and carrying out the instructions in your will. This person will seek and gain intimate knowledge of your life on earth as they sort through your papers, your computer, and your affairs to make sure that all loose ends are tied up. They may also have to exercise some discretion and judgment in carrying out you will.
Most people name a close family member, but you can name anyone. You should name one or more people to serve in case your first choice cannot do so. If you do not name an executor, your will is still valid but the court will appoint an executor, typically a close family member.
Trusteethe person responsible for operating any trust that you set up. They will generally make investment decisions as well as decisions about how to distribute money, in accordance with the Trust instructions. They may also have the power to make loans, to close the Trust, or to appoint the next Trustee. They can hire professionals to assist, such as investment advisors, attorneys, and persons necessary to take care of property or businesses held by the Trust.
The person most appropriate to be named as a Trustee depends on what type of Trust it is, but the Trustee should always be someone who is ethical, trustworthy, and has good common sense.
Guardian of your ChildrenThe person or people responsible for bringing up your children if both parents die before they reach 18. The guardian will be able to do anything you could have done as the parent.
Most people name family members, but you do not have to do so. You may name anyone you want to raise your children. The final decision is made by a Court, but in all but the rarest cases Courts will follow the parents' wishes.
Trustee for your ChildAlthough the guardian raises your children, any money left for your child will be in some type of trust, and can be managed by the same person named as Guardian or by someone else.
Frequently, the best choice for your children is to have a separate Guardian and Trustee. That allows you to pick the person who can best handle money even if they are not the best choice for the children to live with. The Trustee can balance immediate support needs of the child against long-term needs such as a college education or start-up money for a house or business after the children are grown. Many people arrange for the child's Trust to continue until age25 or 30, and the child him or herself can become a co-trustee at some point to allow time to learn how to manage money wisely before they are given a large sum outright.
You should name one or two alternates in case your first choice cannot serve. If there are none, the Court will appoint one.
Special Needs TrusteeA Trust created for a child or adult with a disability has very specific requirements, and the Trustee will need to be someone who is not only sensitive to the needs of the individual (either personally or by consultation with family members and care-takers) but who also is able to follow fairly technical rules related to the use of the money. This Trustee can and should have the sense to seek legal advice whenever there is uncertainty about the use of money in the Trust.
Power of AttorneyYou will name someone you trust to handle your financial affairs if you are still alive but cannot do so yourself. Typically, your power of attorney would be used if you suffer a temporary, but serious injury, or if you become unable to take good care of your affairs as you age.
You should name one of more alternates in case your first choice cannot serve. If no one named can serve, then your power of attorney will be invalid. A Court will NOT appoint someone to hold the power of attorney. If you do not have a power of attorney but cannot handle your affairs, someone will have to go to Court and have a temporary or permanent Guardian named for you.
Medical Power of AttorneyYou can name someone to make medical decisions on your behalf if you cannot do so. This power is only effective when you are not able to make your own decisions.
If you do not have a Medical Power of Attorney, your closest living relative will usually have the power to make decisions. If you wish a non-relative to make decisions, or if you anticipate fighting among your relatives about medical decisions, or if it is not clear who among your relatives would have this power (for example, your parents are deceased, you are unmarried, and you have lots of siblings), you need to have a Medical Power of Attorney.