The People Involved In Estate Planning and Their Roles

May 11th, 2016

While you may think that you do not need it, but preparing your will and establishing a legal trust is always a smart thing to do. It’s necessary to look into the process of legalizing your estate planning if you do not want your life’s earnings and estate to crumble afterwards.

While estate planning can be confusing, it becomes even tougher when you are not familiar with any of the terminology. You may think that understanding these terms doesn’t really help you in any way, but it’s best to be prepared because the need definitely arises at one point.

As the person supervising and declaring how the estate will be distributed, it is a smart idea to understand what each person does in the process.

Who are the Major Players in Estate Planning?

Since there are many people involved in working on and executing wills and trusts, you need to know who they are what their respective roles require them to do:

  • Testator – The testator is the person to whom the will belongs. Hence, as the estate holder, you are the testator.
  • Settlor – The person who establishes a trust is called the settlor. The term grantor can also be used interchangeably.
  • Executor – The executor is the person who has been named by the testator and appointed by the court in the will. During the entire process, the executor is the one in charge of how the clauses are being executed on paper. They are also sometimes referred to as personal representatives. If the executor is a female, she is referred to as an executrix.
  • Administrator – If there is no executor appointed by the testator of the estate, or if the executor is unwilling to serve, the court appoints one in their lieu to act as one through probates. The appointed individual is thus referred to as the estate administrator.
  • Trustee – A trustee is a bank or a trust company which has been appointed as the administrator for a certain individual’s will. The trustee can also be referred to as the fiduciary.
  • Beneficiary – The person who will receive some contribution from an estate holder’s will or a trust is referred to as the beneficiary.
  • Heir – The person or persons who are set to inherit a piece of your estate under the laws of the state, if the will is absent, is known as the heir. The heir and the beneficiary are often considered the same, however, these words cannot be interchanged. This is because the heirs are people set to inherit all the property if no proper will was executed during the life of the testator. On the other hand, the beneficiary is someone who gets something from a will only if the document specifically states so.

Of all the aforementioned roles, the role of the administrator/executor is the only one entitled a certain degree of allowance. The allowance is given in the form of compensation for all the duties performed, and the amount of money given is based on the size of the estate, unless there was a sum specified previously in the will.

The Administrator

It is important to be familiar with the processes involved in estate distribution, so let’s look at the role of an administrator in a little more detail. The administrator has the central role in the entire process, and the following duties are assigned to him or her:

  • Doing the inventory and collecting all the assets of the deceased.
  • Managing all the assets in an estate during the process of administration.
  • Paying all the creditors of the estate as well as the tax and revenue authorities, during the interim period before the will is put into action.
  • Distribution of the assets to the various beneficiaries of the estate, as named in the estate plan.
  • In addition to this, the administrator of the estate has the right to sign all documents, sell property and also distribute assets on behalf of the deceased.

Though the roles listed above are based entirely on the will of the person who has been given the duty, no one can force another party to act as the executor or administrator.

If someone does not want to take up the responsibility of handling the property and estates in the interim period, they can simply send a renunciation form to the court. The person who succeeds them as the executor has the right to seek probate. In rare cases where no executor has been named then the court appoints the closest living relation of the deceased to take up the task.