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Trustee vs. Executor: What’s the Difference?

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Trustees and executors are both fiduciaries – in charge of someone else’s money. Both of them are responsible for the proper distribution of the estate assets. While in this way they may seem similar, there are various reasons why for the stark difference between a trustee and an executor.

Responsibilities of Trustee vs Executor

Both a trustee and an executor have the same responsibility – ensure proper distribution of assets. However, the assets they are responsible for and the freedom they have to carry out their duties vary.

While the key responsibilities of a trustee are to distribute the trust assets to the rightful beneficiaries, the estate executor needs to execute all wishes in the testator’s will and ensure they are implemented in accordance with the law.

Method of Appointment for Trustee vs Executor

The trustee of a trust and the executor of an estate are both chosen by the decedent. However, the way in which they are chosen is different. This difference arises from the kind of estate planning documents that are used to name them.

A trustee is chosen on trust documents like a living will. On the other hand, an executor is chosen through a last will and testament.

Probate Process for Trustee vs Executor

An estate has to pass through probate, a legal procedure overseen by the court, in order to distribute the estate assets. These estate assets include all assets listed in a will and those in a trust as well. However, all of them do not have to go through the probate process.

While the assets listed in a Will need to go through probate, those in a Trust do not. The responsibilities of a trustee and executor, too, vary because of this. A trustee is solely responsible for the distribution of trust assets to the rightful beneficiaries, with no one to oversee the process. However, an executor’s duties are closely overseen by the court, limiting what they can do.

Duration of Duty for Trustee vs Executor

Since an executor’s role is overlooked by the court, their duties are limited to a certain timeframe. Beginning from the time the court formally appoints them as an executor, their duties end only after all estate assets are settled, this includes distributing, holding, and disposing them of as the need arises.

A trustee’s role, on the other hand, includes distribution and management of the assets. With no specific timeframe, a trustee’s role, usually, lasts longer than the executor’s.

Activation of Role for Trustee vs Executor

Both the trustee and the executor’s roles start only after the death of the decedent. However, there is a slight variation.

The executor needs to wait for the court’s approval in the form of letters testament before beginning the duties of the role. A trustee doesn’t have to wait for this approval.

Trustee vs Executor FAQs

Can a trustee and executor be the same person?

Yes. A trustee and executor can be the same person. However, this would also limit the potential of your estate plan by not allowing you to prepare for emergencies. The trustee/executor could become legally incompetent, die, or even refuse the role.

Dividing the responsibility between two people – a trustee for your trust and an executor for your will – can minimize the risk of such situations, increase each person’s accountability, and even reduce the probability of hurting any family member(s).

When does an executor become a trustee?

An executor and a trustee have duties in two different spaces. While the former is responsible for assets in a Will and is accountable to the probate court, the trustee is responsible for those in a trust and is not accountable to any legal entity.

This difference in their accountability, generally, gives the trustee more power than an executor. However, their duties are separate from each other no one party can override the other.

The role of a trustee and an executor may be similar in the ultimate duty they have towards the estate – settling the estate property. However, the process of achieving this and their accountability sets them apart from each other.