From Our “Ask a Question,” Mailbag: “What is an executor as compared to a trustee? Are they interchangeable?”
What is an Executor as Compared to a Trustee?
Before answering this question, it is important to understand what a “fiduciary” is. A fiduciary is a person or organization with a legally enforceable duty to act in the interest of someone else. A legal document can endow a fiduciary to perform certain tasks. For example, managing assets and making healthcare decisions.
Follow this link to learn more about Breach of Fiduciary Duty.
Executors and Trustees are Fiduciaries.
Both executors and trustees are fiduciaries that must act on behalf of someone else and have a duty to act in that person’s best interests. What is the difference between an executor and a trustee? A will appoints the executor while a trust appoints the trustee.
Properly drafted wills have a provision appointing an executor. Upon the decedent’s death, the executor has an obligation to identify the decedent’s assets and distribute them to the beneficiaries listed in the will. The executor must also pay the decedent’s debts and taxes.
The Executor’s Job.
For some estates, the executor’s role is very straightforward. It might just entail liquidating bank accounts and distributing the proceeds to the beneficiaries. However, the executor’s role can quickly become complicated when there are more significant estate assets. The executor can quickly become overwhelmed in juggling business interests, real estate, investments, debts, and ensuring every beneficiary gets their fair share of the estate. Our experienced probate attorneys can help you do just that! [link to probate]
Like an executor, a trustee has a fiduciary duty to act in the best interests of beneficiaries. This time, the beneficiaries are set by a trust instead of a will. A trust can be created during one’s lifetime or after death through a will.
Follow this link to learn more about Irrevocable Trusts or this link to learn more about Revocable Trusts.
Wills that Form Trusts.
If a will creates the trust (known as a “testamentary trust”), the will must appoint both an executor and a trustee. After the decedent dies, the executor is in charge of funding the trust. The executor’s job is complete once the estate administration ends. The trustee must continue to manage and/or distribute the trust property according to the terms of the trust.
In conclusion: What is an Executor as Compared to a Trustee?
I hope you found helpful this short article helpful. My goal was helping you understand What is an Executor compared to a Trustee. I have also included links for more detailed information. If you are interested in drafting or updating a will or trust or being appointed a fiduciary, contact us. Let our estate planning and probate lawyers walk you through the process. Contact our office for a free consultation.
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By Andrew Barron, Esq.