COLUMN: 'When you die, your assets are frozen, and a legal mechanism is required...'

What is the difference between acting as an Executor, Trustee, Or Guardian?

The role or function of the Executor is to take all the necessary steps to carry out the wishes of the deceased as outlined in their Will. This would be important when the Executor collects the deceased’s assets and calls out their wishes under the Will. The role of the Trustee takes over where there are minors. The Trustee manages or looks after the assets until the children reach the age when they become entitled to the assets, in their own right. The role of the Guardian is to take over the day-to-day care of minor children. While the Trustee can also act as Guardian, it might be worthwhile assigning the roles to different people so that you don’t have a Guardian with a potential conflict of interest if they have to make financial decisions. Put simply – the Executor is there to carry out the instructions under the Will; the Guardian is there to take care of the children; The Trustee is the financial manager for all Trust beneficiaries under the Will.

What is an Executor?

When you die, your assets are frozen, and a legal mechanism is required to allow your Executor to unfreeze these assets and manage the estate left behind. The Executor’s main duty is to collect and then give the assets to those entitled – the beneficiaries as outlined by you in your Will. The Executor has a duty to protect property for the beneficiaries - eg. insuring house and contents. The Executor is also obliged to pay your funeral expenses and debts. Your Executor carries out your wishes as set out in your Will.

Who should I appoint as Executors? 

Your Executor carries out (or executes) the wishes set out in your Will. Choosing the right person or persons is an important decision.

Ideally, it should be a job given to two people to act as co-Executors, who are willing, capable, trusted and resident in Ireland.

It is also a good idea to make provision for them to be compensated for doing the job. This can be done by a bequest or by a charging clause in the Will.

The Executor needs to be able to identify assets, take control of them and pass them on to the people entitled under your Will.

So tell them where they can find all the details – whether it’s in a shoebox or safe at home or our office.

Give them your funeral arrangements or choices.

Many people appoint family members or their solicitor as Executors.

There is nothing to prevent a family member, who may also be due to benefit under the Will, from being appointed as an Executor. An Executor (other than a professional Executor) is not entitled to get paid or profit from the role, but they are entitled to recover any reasonable expenses during the administration of the estate and they can also get something under the Will.

It is advisable to inform someone if you chose them as your Executor and to get their agreement to be your Executor.

If an Executor is to receive a benefit under a Will, they cannot witness the Will.

What are Guardians?

The next major decision that has to be made is the appointment of Guardians for your children who are under 18.

This is probably one of the most difficult decisions that any parent will have to make. The consequences of not doing so make it even more important for parents to actually take the step.

If you have young children, you need to appoint someone to look after them.

This person is a Guardian who is in loco parentis to your children.

It is important that the person appointed as Guardian is someone who you would trust to look after the best interests of your children.

Ideally, it should be a job given to two people to act as co-Guardians.

You should make them aware that they have been appointed as Guardians in your Will and get their agreement to be your Guardian.

What are Trusts & Trustees?

The recommended Will for parents of young children is a Will Trust. The usual form of Will Trust has some basic features which can be developed or changed, depending on the circumstances of the family.

Firstly, the Will Trust will appoint Executors. They will also act as Trustees.

Trusts are a good way to provide for minor children, children with special needs or children with disability (or even “wayward” children or children with addictions) or, simply, a way to manage how or when your family get a benefit.

Where children are under age, you need to have a way to look after the finances for those children before they come of age.

This is usually done by a mechanism called a Trust. You need to choose someone you believe can manage money in the best interests of your children – called a Trustee.

In such a Trust, the children will normally take control of the finances when they reach a nominated age. This can be an age of your choosing. Ideally, it should be a job given to two people to act as co-Trustees.

It is advisable to get a person’s agreement to be your Trustee and to discuss your plans for your children with them.

It is worthwhile to put your plans in writing.

It is also a good idea to make provision for them to be compensated for doing the job.

So how do you set up a trust?

The creation of the trust, at its simplest, happens when the parent directs in the Will that their assets are given to the Trustees and are to be held by them for the benefit of the children, and once the children reach a certain age then the Trustees must handover the trust property to the children.

In another form of trust, called a Discretionary Trust, Trustees will have absolute discretion as to how much, when and who is paid.

A Discretionary Trust may be a good way of providing for vulnerable children or children with disabilities.

For further advice or if you wish to discuss any other legal area please contact [email protected] or telephone 052-6124344.