Guardians and Executors
The role of a Guardian is a very important one if you have children. Should you die without making a Will, or if you do not appoint Guardians in your Will, your children could be placed in care until the Court appoints official Guardians to look after them. This could take months and would obviously result in distress for your children and other members of your family. You should remember to request that your appointed Guardians also make a Will themselves to further safeguard the future of your children.
Who should act as Guardians
In considering who should be the Guardians of any children under the age of 18 who may survive you the Law has certain requirements, particularly where the parents are unmarried, or have Divorced or Separated.
Assuming that either parent has the power to appoint a Guardian or Guardians on their death, it is usual for such appointments to take effect on the death of the second parent. Family members are normally appointed, particularly where very young children are involved. As children grow, the appointment of friends may be more appropriate as they are more likely to share your life style and may live nearer than family members.
Although each parent can appoint different Guardians, it is worth remembering that both hold a legal responsibility to act in the event of your death, so selection will have a direct impact on your children’s future. Although possible to appoint different Guardians for different children practical considerations make this unlikely as Guardians must ensure that adequate contact is maintained between the children.
There are also practical considerations such as the age of your Guardians, where they live in relation to you, (would children have to move school for example), how close the relationship is between your Guardians and children now, and if your Guardians know and share your views on how your children should be raised and educated.
Who cannot appoint Guardians
Unmarried fathers who do not have parental responsibility cannot name Guardians, neither will they necessarily become Guardian should the mother die. To ensure that they do, it would be necessary to enter into a written agreement to share responsibility with the mother or apply to the Court. An unmarried Father may become the Guardian if appointed by the Mother, or on subsequent marriage.
Number of Guardians
Where the appointment of family members is being considered, care needs to be taken when considering the appointment of a ‘committee’ of relatives. The obvious disadvantage is that a committee can be difficult to manage and may not always be in agreement. It is advisable to limit the number of Guardians to a maximum of two, and preferable that they share a home as partners. In such circumstances your children would become part of a familiar and stable environment at probably the most difficult time of their lives. Appointment of substitute Guardians may also be considered to ensure continuity if circumstances change.
The Guardian’s duties
The duties of a Guardian are essentially the same as those of a parent, with responsibility for the day-to-day upbringing of your child(ren) including holidays, birthday presents and other expenses. There will be financial, social and emotional implications in taking on such a role and the matter should be discussed in detail between the parties concerned before the nomination is made.
There are circumstances under which a Guardian may be called upon when both parents are not Deceased. For example, where a surviving parent is unable to perform their role because they are overseas, in the armed forces, in prison, disabled or mentally incapacitated, or simply refuse responsibility.
Where a couple are Separated or Divorced and just one of the parents dies, the Guardian will act with the surviving parent and should disputes arise they will have to be settled by the Court, although the surviving parent is still considered the statutory Guardian.
Whilst Guardians have the daily responsibility, financial control is better handled by a third party, normally the Trustees of your estate. The two tasks demand different skills that may not always be found in the same person. It also means that the Trustees, the Guardians and, when they are old enough, your children, can share in the decision making process.
The appointment of testamentary Guardians for children allows you to decide who should be responsible for your children’s welfare, maintenance and education, and how these should be funded in the event of both of your deaths while any child is under the age of 18. There is no legal reason prohibiting appointing the same people as Executors, Trustees and Guardians if you wish, but you should be aware that there is a potential conflict of interest in that the Trustees are responsible for advancing sums of money held in Trust to the Guardians to help with Guardianship duties. If the same individuals are appointed there is potential for financial abuse which, in the worst scenario, could lead to your children losing their inheritance.
An Executor is a person(s) or institution appointed by a testator to carry out the terms of their Will. If you are considering asking someone to serve as the Executor of your estate, be sure you understand the duties and responsibilities of Executors. Being the Executor of an estate is not really an honour; it is a difficult and time consuming roll that is likely to take many months. Dealings with Beneficiaries can often prove difficulty, and it is seldom appreciated that the role carries personal legal liability.
Appointing an Executor
You should choose an Executor to carry out your wishes, as stated in the Will. Executors can be Beneficiaries under the Will and often people appoint their spouse, partner or children as Executors. Check with your proposed Executors that they are willing to take on this role before naming them in your Will, as it can involve considerable responsibility. Consider naming more than one Executor in case one dies before you.
It may also be easier for the Executors if there is more than one person to share the work and the responsibility. The Executors may have to deal with any day to day administration of your estate in the period before it can be distributed. Executors can claim from the estate for expenses incurred in carrying out their duties. If the estate is large or complicated, there may be advantages in appointing a Professional Executor. Professional Executors normally charge between 3 and 5% of the value of the estate for the work that they do and often an hourly rate in addition to this.
An Executor must carry out certain tasks and duties to fulfil the legal obligations of the task. These responsibilities include making an exhaustive list of all the assets of the estate, from personal to real property, bank accounts, investments, debts (including credit cards), utility bills and loans must also be accounted for. It is seldom appreciated that the Executors duties also include a responsibility to pay any Inheritance Tax necessary. Calculate and declare the value of the estate to HMRC on an Inheritance Tax return within 12 months of death. Pay the Deceased’s Tax. Failure to submit an accurate account to HMRC may leave an Executor open to personal liability or penalties.
Trustees are the persons appointed to manage the Trust assets. They need to be people you can trust to carry out your wishes.
The requirements to act as a Trustee are:
Age 18 or above
Have mental capacity, and
Not be an undischarged bankrupt,
A Trustees’ duties include a legal responsibility to manage Trust assets on behalf of, and in the best interests of beneficiaries.
To be familiar with the terms of the Trust so they can administer it in accordance with the Trust Deed.
Trustees must use their utmost diligence to avoid any loss. If they are negligent and a loss arises therefore they may become personally liable to beneficiaries for that loss. There is also a responsibility for the calculation and payment of any tax.
Trustees in England & Wales must act unanimously (in Scotland decisions can be made by majority)
Due to the onerous responsibilities of acting as a Trustee consideration should be given to appointing a professional such as a Trust Corporation either alone or, more commonly, as a co- trustee or reserve.