Friday, March 4, 2016

Knowing the players of estate planning

Who Is Involved in Probate and Estate Planning

Picture this scenario: someone who is currently alive has named you the executor to their will or the trustee to their trust. Sounds like you are an important person now, right? Well, you certainly are. Now here’s the million dollar question, do you know what it actually means to be the executor or the trustee? This is a huge responsibility and the most important requirement at this time for you as being named as the fiduciary is knowledge. You need to know who exactly all the key players are in the world of probate and estate planning. Let's start:

The Roles

Administrator: Someone passes away but leaves no will. What happens next? The court has to appointment someone to handle the estate so Surrogate's Court appoints the estate administrator or otherwise know as the administrator. They typically pay the bills of the estate, deal with the beneficiaries, and are essentially involved with the estate until it is closed.

Executor: A person dies but this time a will is in place. The will should identify who will represent the estate and handle all of the operations. This appointed individual is the executor. Usually, the executor is compensated for all the work they do.  Similar to the administrator, they are heavily involved with the estate and are typically dealing with the day to day operations until it is closed out.

Guardian: Surrogate's Court decides who the guardian should be. A guardian is appointed when a person either gets really old, or has a physical or mental injury which incapacitates them and takes away their ability to live independently and make decisions on their own. The guardian takes care of their bills and living situation. The guardian can admit this individual to an institution such as a nursing home to care for the incapacitated individual full time.

Personal Representative: This is just a fancy term referring to an executor or an administrator.

Your Responsibility

Regardless of what your title becomes, you need to be aware of one thing: you are responsible for the financial and or living welfare of the individual that you have been appointed for. As the fiduciary, you have an obligation to be ethical and work only in the interest of the estate or individual. Knowing more about estate planning  and the probate process can greatly benefit your understanding of your duties.

Be aware if you do decide to act dishonorably (such as stealing from the estate or neglecting your duties), don't think their isn't a line of lawyers waiting to be retained to sue you for breach of fiduciary duty, negligence, fraud, misdealing, and misappropriation. Money is at stake. If you are ever selected as a fiduciary and you think you will be overwhelmed, simply pass up the opportunity. Their are plenty of good estate lawyers in NY who can take over your duties and ensure the responsibilities of a personal representative will be handled with transparency and professionalism.

In conclusion, estate planning has individuals and parties with a lot of roles. Always educate yourself on what exactly needs to be done if you are ever appointed such a role. There is no harm in backing out of it. Being the representative can be a commitment which lasts months if not years. If you do back out of it, make sure you find a suitable candidate to take over your tasks. A lawyer can make a great asset and resource for such a situation but you need to be picky. There are plenty of good lawyers out there as well as bad lawyers. Nevertheless, if you do your due diligence, this whole probate process can go smoothly when you have the right representation by your side.

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