Estate planning can seem intimidating. Between the various tools, planning options and appointments, you may wonder what everything means. Feelings of confusion and uncertainty are understandable as you likely do not have a full working knowledge of the laws and details relating to estate planning. Fortunately, various resources exist for obtaining useful information and assistance when it comes to making a plan.
One area in particular that may cause some confusion relates to who will be in charge of your estate after your passing. You may have heard of personal representatives, executors, administrators and trustees, but you may not know whether you need one, any or all of these positions. A breakdown of each term and role may allow you to better understand how the positions could fit into your plans.
An all-encompassing term
First of all, the term "personal representative" generally comes up often during estate planning and probate proceedings. A personal representative is someone who handles the remaining affairs of the estate after your passing, which means the term could refer to either an executor or an administrator. You could appoint your personal representative yourself, or the court may appoint the representative.
Executor vs. administrator
If you do create an estate plan and name a personal representative in your will, that individual or entity will obtain the title of executor. The executor will handle all necessary activities when it comes to closing your estate, such as dealing with claims against the estate, contacting beneficiaries, notifying applicable parties of your demise and handling your assets and debts. Naming a person ahead of time may give you more peace of mind in knowing that your final affairs will be handled by a trusted and responsible party.
An administrator of an estate relates very similarly to the executor. However, the term administrator is used when an estate plan does not exist, meaning you did not appoint a personal representative and a judge must appoint one. Also, rather than having your instructions to work with as an executor likely would, an administrator would have to address your affairs in accordance with Arizona state law.
If you create a trust as part of your estate plan, you would name someone to handle the affairs of the trust and manage the funds or other assets that have been placed into the trust. This individual would obtain the title of trustee. While a trustee does handle a portion of your final affairs, he or she does not see your estate through probate. Rather, his or her responsibilities remain solely in connection with the trust and its terms.
If you feel that having a trusted person in charge of your estate may bring you peace of mind, you may want to consider potential candidates to act as your personal representative or trustee. Consulting with an attorney could help you learn more about these roles, what personal traits may make for ideal candidates and how you can legally put someone in charge of your affairs.