Beneficiaries & Fiduciaries: Understand These Key Roles in Estate Planning

Estate planning will always be a complex process. However, it can be made easier by breaking it down into smaller steps. One of these steps is choosing your beneficiaries and fiduciaries. 

These are the people who will receive your property (beneficiaries) after you pass and the people who will carry out your wishes (fiduciaries). This is a big decision that can affect the end of your life and the lives of those you love. 

Let’s look at the roles and responsibilities of beneficiaries and fiduciaries and how they can fit into your estate plan. 

Who Are Beneficiaries? 

Beneficiaries are the people you choose to receive assets from your estate. 

The beneficiaries you choose can be relatives, friends, colleagues, or complete strangers. You can also require that your beneficiaries reach a certain age or milestone (marriage, college graduation, professional accomplishment) before property is distributed to them. 

Alternatively, you could leave all or part of your estate to your alma mater, a favorite charity, a museum, or your business. 

You have the ultimate say into who your beneficiaries will be. 

Who Are Fiduciaries? 

Fiduciaries are people who have a legal and financial duty to act in your best interest. Different types of fiduciaries have different responsibilities. Here are a few common types of fiduciaries you may consider depending on your situation: 

• Executor 
  
  The executor of your will settles your estate according to your directions outlined in your will. They collect your assets, pay debts, and distribute remaining funds, among other duties. Your executor will work with the court, representing your interests, if your estate goes through probate. 
   
• Trustee 
  
  A trustee can be a person or organization you choose to manage a trust. A trustee controls and invests trust assets and distributes benefits. A trustee is a long-term role that can last for several years, depending on the terms of the trust. 
   
• Guardian 
  
  A guardian, also known as a conservator, is legally responsible to manage the well-being or finances of a conservatee. A guardian must act in the best interests of the conservatee, usually a minor child or someone who is unable to care for themselves. 
   
• Agent 
  
  An agent is a person you appoint to act on your behalf in legal, financial, and medical matters when you can’t. You may have also heard of this referred to as acting under power of attorney. You can give your agent broad or limited authority depending on your circumstances and preference. 
   

How to Choose Fiduciaries 

Deciding who should carry out your wishes is a difficult decision and there is a lot to consider. Working with a professional can be very helpful and reduce the stress on your loved ones.

This article is for informational purposes only. Pinnacle Bank is not able to offer legal or tax advice. Speak with your estate planning attorney for guidance.