When working with your estate planning attorney, you want to make sure you’re putting the right people in the right positions. Therefore, it’s important to understand the common terms for the players in your estate plan.
Who does what in Estate Planning?
Fiduciary: All persons or financial institutions (i.e. a bank or company) who act for the benefit of others. In estate planning, the Personal Representative, Trustee, Attorney-in-fact are all fiduciaries.
Beneficiary: The persons or organizations named in a document who will be receiving the benefits of an estate or account. A beneficiary can be named in a Trust, Last Will and Testament, or a financial instrument such as a bank account, annuity or retirement plan.
Testator/Testatrix: This is the person who is creating their Last Will and Testament.
Personal Representative: The individual named in a Last Will and Testament who distributes the deceased’s estate to the beneficiaries as named in the document. This is a fiduciary role. This role was previously called an executor/executrix but was recently changed in the Massachusetts Probate Court.
Grantor: The individual(s) who are creating a Trust. They are also known as a donor, trustor, settlor, or trust maker.
Trustee: The person or institution who manages the Trust. This person is responsible for managing the trust according to the trust instrument.
Successor Trustee: The person who takes over managing the Trust should the initial trustee resign, die, or fail to act for such reasons as incompetence or incapacity. The trust instrument typically names a successor trustee or provides a method by such naming can occur.
Attorney-in-Fact: This is the person who is named in a Durable Attorney Power document. They are responsible for stepping into your shoes to handle all decision making except healthcare should you become incompetent or incapacitated. The attorney-in-fact is often responsible for handling your bank account, paying your bills, and making investment decisions.
Health Care Proxy: This person will step into your shoes to make health care decisions should you become incompetent or incapacitated. It is important you have a conversation with your named health care proxy to make sure he or she knows what’s important to you with respect to health care including those that involve end of life decision making.
Guardian: This is the person you name to take care of your minor children should anything happen to you before your children reach the age of 18 years of age.
Understanding these terms will make it easier for you to choose the right people to carry out your estate plan wishes. At Generations Law Group, we spend the time with you to make sure you have thorough understanding of these important roles and how best to choose the right person.
Founded by a nurse attorney and with offices in Acton, Burlington, and Sudbury, Massachusetts, Generations Law Group helps families navigate the complex areas of estate planning and elder law to inform and protect loved ones of every generation.