By City National Bank
April 27th, 2023
When a close friend or family member passes away, you may be surprised to learn that you have been named to serve as executor, trustee or guardian.
Sometimes you can be named to fulfill two of those roles or even all three, which carry immense responsibilities. Unfortunately, most individuals do not discuss these issues with their loved ones ahead of time.
“Anyone can be appointed as a trustee, executor or guardian, whether they’re an aunt, a sister, an uncle, a friend, a financial advisor, a lawyer or a CPA,” said a senior trust advisor for City National Bank. “There’s no obligation to let someone know ahead of time that they will be named, but it’s definitely better to prepare them.“
All three roles have different obligations. Generally, an executor administers the estate of the person who died, while a trustee administers a trust for the benefit of the named beneficiaries. A guardian makes decisions for minor children of the person who died or for an incapacitated adult.
If you’ve been named to take on one or more of these roles for a friend or family member, please keep in mind that you can work with outside specialists, including their attorney, tax advisor or wealth planner, or your own for that matter, for advice.
If you are surprised that you were named as trustee, guardian or executor, or your circumstances have changed since you were asked to fulfill one of those roles, you can decline the responsibility.
Typically, there will be successors named in case the person nominated as trustee, guardian or executor can’t or won’t take on the job. If not, there may be a back-up process outlined to name someone other than the original person. Naming a back-up person or institution as a trustee or executor is an important step to protect beneficiaries in case the person named is incapable or unwilling to take on the required responsibilities. For a guardian, establishing a back-up person is even more important since a guardian is expected to take on the role of a substitute parent.
