Difference Between Executor and Trustee
In estate planning, there are several roles you’ll have to appoint your most trusted loved ones to complete. Some roles are completed upon your death, and others can fulfill these duties while you’re still alive under certain circumstances. Two significant roles are the executor and trustee. So what’s the difference between executor and trustee? Simply put, a will appoints an executor, and a trust appoints a trustee. Let’s dive into the difference between executor and trustee in hopes it will help in your estate planning.
Roles of Executor and Trustee
An executor and trustee have very separate roles, but there are some similarities. Both an executor and trustee manage assets and must make decisions for the best of the will or trust. An executor will act according to the will, and a trustee will act according to the trust’s instructions. This is good to know as you decide who your executor and trustee should be. Going deeper into the roles of each will help you better distinguish between the two.
When you complete a will, you must appoint an executor. You will likely even appoint a backup executor, too, if your original executor is unable or unwilling to perform the tasks. Then when you die, the executor you select in your will is responsible for executing the items in your will and closing out your estate. This could include dividing assets among the beneficiaries, paying any debt off, and handling real estate.
The executor’s role might be short and simple if your estate and assets are small. However, if you have a large or complex estate, it will take longer for the executor to close out the estate. Merriman Law specializes in estate administration and can help you close out the estate of a loved one.
A trustee is selected when you create a trust. The trustee’s job is to manage the assets of that trust. Trusts are designed for many different circumstances while someone is alive or after their death. The most important thing to remember about the role of a trustee is that they must act in the trust’s best interest. Usually, there are instructions provided in the trust, and the trustee is tasked with managing the trust based on those instructions.
Like with an executor, the length and complexity of the trustee’s role depends on the size and specifics of the trust. For example, if both parents die and leave money in a trust for their minor children, the trustee will likely manage the money in that trust until the children become adults, or however long is outlined in the trust. Because of all that is required of a trustee, it’s critical you carefully choose a trustee.
Key Differences Between Executor and Trustee
There are key differences to point out between an executor and trustee. These differences are also important to share with whoever you appoint as your executor or trustee, so they fully understand what will be asked of them.
The most significant difference between an executor and a trustee is the documents that appoint them. A will appoints an executor, and a trust appoints a trustee. Because of this, the role of an executor will only start upon the death of the person who created the will. A trustee may fulfill their duties while the trustor, the one who created the trust, is still alive. Some trusts only become active after the trustor’s death, so the trustee may begin managing the trust upon death.
Another difference involves the process the executor and trustee go through to perform their duties. An executor will go through probate to carry out the will, whereas a trustee will not have to take the trust through probate. A living trust is not required to go through probate, and a will is required to go through probate. Your executor will likely have some extra steps when carrying out your will because of this, so consider who in your life can carry out this role effectively.
An executor and trustee are important roles to fill in your estate planning. You should select trusted individuals in your life that are able and willing to fulfill these roles. Completing an estate plan will give you and your loved ones peace of mind. You will know that your wishes will be honored, and your family members will appreciate that you have specific instructions in place. If you need guidance with your estate plan, will, or trust, the law professionals at Merriman Law Firm are here to guide you through this process.
Merriman Law Firm is the trusted law firm in Florida for estate planning, federal estate and gift tax planning, probate and estate administration, and trust administration. Our law professionals also focus on probate and estate litigation, trust litigation, and guardian litigation. Request a free consultation with Merriman Law Firm to get started today.