Custodian vs. Guardian: What’s the Difference?
When developing your will and estate plan, you’ll need to designate various fiduciary roles including guardian, custodian, executor, trustee, and agent. Here’s a quick overview of these different designations (thanks to the American Bar Association glossary):
Guardians are most commonly referenced in a person’s will when they name the person(s) who will care for the financial and physical well-being of their minor-age children when they die. However, a guardian could also be appointed by court order when a person becomes incapacitated, or a considered a “protected person” who has demonstrated behavioral deficits regarding their estate affairs. An example might be someone with dementia who is no longer able to manage their affairs.
Custodians, on the other hand, are appointed to manage the assets of a child until the child is of the appropriate age to do so themselves. This role exists because minor children cannot inherit money or assets outright, making the custodian necessary.
Executor – The individual appointed to carry out the terms of a will and administer your estate when you die (also called a personal representative).
Trustee – The individual (or bank or trust company) designated to hold and administer any trust property (also called a fiduciary). The trustee has the duty to act in the best interests of the trust.
Agent – This refers to the person who is authorized under a power of attorney agreement to act in your place as agent or attorney-in-fact with respect to all legal and financial matters. In a health care power of attorney, for example, the agent could make any health care decisions should you be incapacitated.
There’s a lot to understand when it comes to estate plans. If you’re reviewing yours now to ensure it covers your bases now and in the future, it’s smart to consult an attorney. Call Moran & Long if you need help connecting with a legal representative who understands estate planning for seniors, federal and state estate tax laws, “elderlaw”, and related matters.