What's your role in transitioning wealth?

Points to know

• Estate planning maximizes the benefits of your wealth for your beneficiaries.
• Taking time to consider what's most important to you can help you define your legacy.

Getting to know who does what

The whole concept of estate planning may be new to you, but don't worry. We can provide the information you need to fulfill your role. Here's an overview of the most common estate planning roles and their responsibilities.

Roles for estate matters

Beneficiary

Beneficiaries are individuals or entities entitled to receive part or all of the assets in a trust, retirement account, life insurance policy, or annuity. Beneficiaries are generally named when these policies and accounts are created.

Beneficiaries can also be named on other types of investment accounts through a transfer on death designation.

If you're named as a beneficiary, the steps you'll need to take will depend on the type of assets you inherit or the specific provisions of the will or trust in which you were named. The executor of the estate, or the trustee of the trust, can guide you through the process.

Executor

If someone has named you as executor, you'll be responsible for gathering their assets, managing and maintaining those assets, completing the administrative and tax responsibilities of the estate, and distributing assets according to their wishes.

These tasks can take anywhere from 6 to 24 months.

Trustee

If you've been named as a trustee, you hold the legal title to the assets in a trust.

Trustees are responsible for investing and managing the trust assets, distributing the assets according to the terms of the trust, keeping accurate records, and filing all necessary tax returns.

The grantor of the trust may also have designated co-trustees to work with you. Corporate trustees, especially, can often help relieve the burdens of administering a trust.

Successor trustee

If you're a successor trustee, you'll be called upon to assume control of a revocable trust after the grantor's death or if the grantor becomes mentally incapacitated. If that happens, you'll become a full trustee.

If you're named as a beneficiary, the steps you'll need to take will depend on the type of assets you inherit or the specific provisions of the will or trust in which you were named. The executor of the estate, or the trustee of the trust, can guide you through the process.

Roles for personal matters

Durable power of attorney agent

A durable power of attorney agent is an individual who's been granted the ability to handle a person's financial affairs. Many people appoint an agent to act on their behalf if they become incapacitated.

If you've been given durable power of attorney, get to know the experts who've been involved in the estate planning and financial affairs of the person who appointed you—estate planning attorneys and accountants, for example.

Guardian

If a parent has named you as a guardian, you'll be responsible for raising their children to adulthood if both parents are deceased.

If you don't want to serve as a parent or can't handle the responsibility, have that conversation as soon as possible. While it might seem unlikely you'll be needed, you can't assume it won't happen.

Health care proxy agent

A health care proxy agent is the person designated to make decisions about an individual's medical care if the individual becomes incapacitated.

If someone has named you as a health care proxy, make sure you're clear about the person's wishes in advance. By definition, if you're called upon to make decisions, it'll be too late to discuss.