Estate planning involves preparing your loved ones for life once you pass away. While the process is often misconstrued as morbid, the opposite is actually true.
Estate planning can give both you and your family members much-needed peace of mind. It can allow you to spend the rest of your days with a significant weight off your shoulders.
That being said, you can’t do it all by yourself. Several parties will be tasked with ensuring that your instructions are carried out. The most important parties involved in the estate planning process are called fiduciaries. Who are they?
The executor of the estate
Being the executor of an estate is a huge responsibility. This is the person tasked with settling your estate according to your instructions. They will have to notify relevant parties of your death and keep beneficiaries informed during probate.
The executor must always act in the best interests of the beneficiaries. They cannot act in their own best interests or profit from your estate. When making your estate plan, it’s important that you choose your executor carefully. You need someone who is trustworthy and both physically and mentally able to carry out their fiduciary duties.
Trustees
Estate plans often comprise numerous legal documents. A will is generally the fundamental part of an estate plan, but trusts can also play an important role. Trusts can carry out multiple functions. For example, you may set up a trust that releases funds over the years to pay for your child’s college fees. Or, you could establish a trust that ensures that your favorite charity remains financially stable for years to come.
The person tasked with managing the assets in a trust is known as a trustee, and their duties are fiduciary in nature. They must manage the trust according to your precise instructions. They cannot profit personally from the trust or ignore instructions. Failure to adhere to these conditions is a breach of fiduciary duty.
At each stage of the estate planning process, it’s vital to have legal guidance behind you. This can help ensure that you choose fiduciaries who will take their duties seriously.