Executor vs Trustee
Making a will before one passes away is a very wise decision as it ensures that one’s assets are managed and distributed according to the provisions of the will and there is no room for a dispute between heirs of the deceased person. Another important decision is picking up the right persons to act as executor and trustee. These are fiduciaries who are people that are obliged to carry out instructions given in a will in an obligatory manner. Many people think that an executor is same as a trustee but in reality there are many differences in the roles and responsibilities of executor and trustee. This article attempts to highlight these differences.
Executor
An executor is a person named by the deceased in his will to execute the provisions of the will and appointed by the court to perform this role. Once the probate court appoints the person named by the deceased as an executor, he becomes eligible to administer the estate. An executor is someone close to the deceased, trustworthy, and capable to carry out financial transactions. An executor is by law necessary as there has to be someone to collect taxes of the estate, to protect the property, to pay claims such as taxes, and to represent the estate in case of any disputes or claims made by others. An executor is also required for liquidation of the estate to distribute the assets among the heirs or the beneficiaries. There can be even more duties and functions of an executor as mentioned in a will even though these functions may not be required by law.
Trustee
If the deceased has established a living trust before passing away, it is a trustee he requires to name in his will before passing away. A trustee is the person who becomes in charge of the affairs of this trust, and he is not required to obtain permission from the probate court as the property of the trust is not considered to be the property of the estate of the deceased. The trustee discharges his duties till he is able to liquidate and distribute the assets among the beneficiaries. A person can be the trustee of his living trust when he is alive, or he can choose to make his spouse a co-trustee. In case the spouse remarries, there can be a provision of a co-trustee after the death of the owner of the estate.
What is the difference between Executor and Trustee?
• Though there are similar duties and functions of executors and trustees, an executor has to be appointed by the probate court; trustees need not deal with the probate court.
• Executor gets a statutory fee, whereas trustee is entitled to a just compensation for the services he renders to the trust.