New parent? Expecting? Essential Roles to Consider

When creating a Will for caregivers of children, there are three separate roles to consider. Each role is separate in its significance, desired skillset, and responsibilities. That said, you may have a person in your life who would be appropriate to appoint in all three roles. Or, you may wish to appoint a different person in each role. There are advantages and disadvantages on both sides, which we always discuss in detail with our clients. In today’s post we have an overview of the three roles which should be helpful for caregivers when first starting to think about their estate planning.

(1) Personal Representative (i.e., executor)

A personal representative is responsible for the administration/management of a testator’s (deceased person) estate and must closely follow the instructions left in the Will. Personal representatives serve as fiduciaries and, therefore, have the duty to act in good faith, be honest and loyal, and act in the estate’s best interests.

Once the estate is in the hands of the personal representative, the individual(s) responsible are required to take the estate through the probate process. Once finalized through the court system, the representative is responsible for administrating the estate to its beneficiaries. They are also responsible for filing taxes.

The selected personal representative should be 18 years old, trustworthy and reliable. They should be someone you trust to adequately administer personal and financial matters under the Will. The role of the personal representative can be overwhelming and time-consuming, during an already very stressful time. It is also an option to appoint a trust company to handle the administration of the estate at a cost.

Most people wish to appoint someone younger than them in this role. And it is certainly great to have an alternate who is younger - however, when making this decision one must consider: “if someone needed to step in tomorrow, who would I want it to be?” Often a spouse would be listed first - then, younger people may choose to name a parent or other older relative, colleague, or friend they trust … with someone their own age as a further alternate. The time frame of this role can be considerably less compared to the guardianship and trustee roles, ranging from several months to several years, depending on the size of the estate and its complexity.

(2) Children’s Trustee

The Children’s Trustee(s) is a person who is appointed to make financial decisions with respect to the ongoing management of a child’s inheritance. They must act in the best interest of the estate and beneficiaries as a fiduciary. A trustee is often a friend or family member with the willingness and ability to take on such a responsibility. However, it is also an option to appoint a trust company to handle the management of the trust at a cost.

A Trustee would be making financial decisions about the management of any funds held in trust for the children. This can weigh into the personal - for example, “should we continue to maintain the family cabin and incur the costs associated with doing so so that the child can continue to enjoy the family cabin and possibly take it over as an adult OR should the cabin be sold and the funds invested on the child’s behalf?” But truly personal decisions and day-to-day decisions mainly rest with a guardian (discussed in more detail below). Other responsibilities may include paying bills, managing investments, and applying for benefits on the beneficiary’s behalf.

For a minor, the primary role of a trustee is managing the minor’s trust and ensuring all the parameters outlined in the will are honoured. The primary difference between a personal representative and a trustee is the personal representative manages the estate through probate, and the trustee deals with the ongoing management of a child’s inheritance, until at least age 18 (but often until age 25 or 30; this can be customized in the Will).

The timeframe of the Trustee depends on the age set out for final distribution. For example, is a trust is set up in a Will to be in existence until a child turns 30, and such child was only 5 years old when the trust came into effect, the trustee would manage the trust for 25 years. Importantly, it is possible to appoint alternates or give the ability to appoint a replacement trustee.

(3) Guardian

The person or persons designated as the guardian are responsible for a minor’s well-being. This includes all personal decisions and caring for the minor’s best interests. The guardian(s) must ensure that the needs of the minor(s) are met - including the child’s physical, mental, and emotional health/development, medical care, food, clothing, and shelter. Overall, the guardian has the legal authority to make the day-to-day decisions for the minor(s), including where the child can live. It is important to appoint someone who you trust to make decisions in a similar way to you, or in a manner you would be comfortable with. As mentioned above, a trust company could be appointed to manage a child’s trust … but could not act as a guardian, so someone else would need to be appointed in that role.

Importantly, guardianship still needs to be finalized by a court order – which is why we recommend being sure the person you name as an alternate guardian is aware of their appointment: so that they could step in immediately, and get advice at the time as to what, if any, legal steps should be taken. The guardians’ powers are not absolute, and the court may intervene, if needed, in circumstances such as neglect. As well, if there are multiple guardians of a minor and a disagreement arises over how powers should be divided, the court can dictate who has the authority to make certain decisions.

If another person already has certain powers and responsibilities, for example a separated couple who share parenting responsibilities, the person you name as your replacement guardian in your Will is only entitled take on the powers, responsibilities, and entitlements of guardianship that you had at the time of your death. Accordingly, any other existing parent/guardian is likely to maintain their current powers, responsibilities, and entitlements. A statement in your Will cannot override existing guardianship rights of another parent.

In most circumstances, the timeframe of a guardian is until all minors listed under the Will attain 18 years of age. That said, maintaining informal guardianship is of course possible once the child has turned 18. That said, the timeframe for this role is, from a legal perspective, at most 18 years under Alberta law.

All three roles are significant. Deciding who to appoint in each role can be stressful. But understanding what each role entails can help in this decision process, as every situation can be different.

Disclaimer: The information provided in this blog post is for general informational purposes only and should not be considered legal advice. For specific legal advice, please consult a qualified professional.

Thanks very much to Katelyne Steele for her assistance in preparing this post! We are so grateful to have her. Here is some more info about Katelyne:

Hi, my name is Katelyne, and I am a policy studies intern at Modern Wills for the 2023 summer! I enjoy the opportunity to research and inform on estate legislation, rules, guidelines, etc., for our clients to read and better understand estate planning.