Planning for the future is about more than simply making a Will. It also means choosing the right people to carry out your wishes and protect the interests of those you leave behind.
Many people are unsure of the difference between an Executor, a Guardian and a Trustee. While these roles are often mentioned together, each has an important and distinct purpose.
a) WHAT IS THE DIFFERENCE?
Executor
An Executor is responsible for administering your estate after your death. Their role is to carry out the instructions contained in your Will, collect your assets, pay your debts and funeral expenses, and distribute your estate to the beneficiaries.
Guardian
A Guardian takes responsibility for the day-to-day care and upbringing of any children under the age of 18. This is one of the most important appointments a parent can make.
Trustee
A Trustee manages assets that are held on behalf of beneficiaries, most commonly minor children. They look after the trust property until the beneficiaries become entitled to receive it, usually at an age specified in the Will.
Put simply:
- Executor – carries out your wishes after your death.
- Guardian – looks after your children.
- Trustee – manages money and property held in trust.
b) THE ROLE OF AN EXECUTOR
When a person dies, many of their assets become “frozen” until somebody has legal authority to deal with them. The Executor obtains that legal authority by applying for a Grant of Probate.
The Executor’s responsibilities include:
- locating the original Will. In most cases, the Will is held by the Solicitor who acted for the deceased person, and the Executor will have knowledge of it;
- identifying and protecting the deceased’s assets;
- arranging payment of funeral expenses and outstanding debts;
- preparing the necessary information for Revenue and the Probate Office;
- obtaining the Grant of Probate;
- collecting the estate assets;
- distributing the estate in accordance with the Will.
Some assets, such as jointly owned property or assets with a nominated beneficiary, may pass automatically outside the estate.
After the Grant of Probate issues, the Executor has legal authority to deal with the estate. This may involve closing bank accounts, selling shares, transferring or selling property and ultimately distributing the estate to the beneficiaries.
c) CHOOSING THE RIGHT EXECUTOR
Ideally, your Executor should be someone who is:
- Willing to accept the role;
- Trustworthy and organised;
- Capable of dealing with financial and legal matters;
- Resident in Ireland, where possible.
Many people appoint two co-Executors to share the responsibility.
It is possible for a beneficiary to also act as an Executor. However, a person who is receiving a benefit under the Will should not act as a witness to the signing of that Will.
It is sensible to discuss the appointment with your proposed Executor beforehand and obtain their agreement. You should also ensure they know where your original Will is stored and where important financial information can be found.
Although non-professional Executors are generally not entitled to payment, they may recover reasonable expenses incurred during the administration of the estate. A Will may also provide a specific gift or include a charging clause where appropriate.
d) APPOINTING GUARDIANS
For parents of children under 18, appointing Guardians is often the most important decision made in a Will.
If both parents die while the children are still minors, the appointed Guardians assume responsibility for their day-to-day care, welfare and upbringing.
When choosing Guardians, consider appointing people who:
- Share your values;
- Will provide a stable and loving home;
- Understand your hopes and ambitions for your children;
- Are willing and able to take on the responsibility.
It is advisable to appoint two Co-Guardians where possible and to discuss the appointment with them in advance.
Many parents also leave written guidance outlining their wishes about their children’s education, upbringing and general welfare.
e) TRUSTS AND TRUSTEES
Where children inherit under a Will while they are still minors, they cannot legally receive or manage those assets themselves.
Instead, the assets are held on trust by the Trustees until the children reach the age specified in the Will.
A Trustee’s responsibilities include:
- Managing investments prudently;
- Protecting the trust assets;
- Making financial decisions in the children’s best interests;
- Distributing the trust assets when the children become entitled.
The chosen age for receiving an inheritance does not have to be 18. Many parents prefer to delay their children’s entitlement until an older age, such as 21, 23 or 25, believing they will then be better equipped to manage a substantial inheritance.
As with Executors and Guardians, appointing two Trustees is generally recommended.
f) CAN TRUSTEES USE THE MONEY BEFORE THE CHILDREN REACH THE SPECIFIED AGE?
Provided the Will allows it, the Trustees may use trust funds for the children’s benefit before they become entitled to their inheritance.
Examples include:
- School expenses;
- College fees;
- Medical expenses;
- Maintenance and general welfare.
This allows the Trustees to meet the children’s needs while preserving the remainder of the trust until the chosen age.
While the same person can act as both Guardian and Trustee, appointing different individuals may help avoid potential conflicts of interest where financial decisions directly affect the children’s day-to-day care.
g) DISCRETIONARY TRUSTS
A Discretionary Trust can provide additional flexibility where a beneficiary has particular needs or where the testator wishes the trustees to retain control over how and when assets are distributed.
This type of Trust may be appropriate where a beneficiary has:
- a disability or special needs;
- ongoing care and support needs;
- difficulty managing financial matters; or
- other circumstances requiring long-term financial protection.
Rather than the beneficiary becoming automatically entitled to the inheritance, the Trustees decide when, how much and for what purpose payments should be made.
This allows the Trustees to adapt to changing circumstances while ensuring the trust fund is used solely for the beneficiary’s benefit.
In some cases, careful planning through a properly structured Discretionary Trust may help protect a beneficiary’s access to certain State supports.
Parents creating a Discretionary Trust are often advised to prepare a separate Letter of Wishes. Although not legally binding, it provides guidance to the Trustees on how they would like the trust to be administered.
h) FINAL THOUGHTS
Planning ahead is ultimately about protecting the people who matter most.
Choosing the right Executors, Guardians and Trustees is just as important as deciding who should inherit your estate. These appointments require careful thought, open discussion and professional advice.
Taking the time to make these decisions now can provide certainty for your loved ones at what will inevitably be a difficult time. Careful planning can help ensure your wishes are carried out and your family is protected for years to come.
Importantly, your choice of Executors, Guardians and Trustees should be reviewed whenever your personal or family circumstances change, such as following the birth of a child, a marriage, divorce, death of an appointed person or significant changes in your financial affairs. A Will should be reviewed periodically to ensure it continues to reflect your wishes.