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Executors and Trustees: What's the Difference Between the Two?

Many people use the terms “executor” and “trustee” interchangeably.

However, they’re not the same thing. And when it comes to estate planning, it’s a good idea to have a good grasp of these two positions. You may need to choose an executor, a trustee or both.

What’s the Difference?

The simplest way to explain the difference is to say that an executor executes the provisions of a will while a trustee oversees a trust. A living trust and a will are different documents, but there can be some crossover between the two. You name an executor in your will, and you designate someone as a trustee when you establish a living trust.

The job of an executor begins when you pass on while the job of the trustee starts while you’re still alive. Often, people name themselves as trustees, with the title passing to another on death.

What Does an Executor Do?

An executor will handle affairs as outlined in a will. You can choose an executor, or the court can choose one as part of the probate process. The executor will take control of the named assets in the will and dispense them according to the will’s instructions. The executor will also handle the debts of the estate.

There’s a lot more an executor can do to carry out the provisions of your will, such as:

  • Hire attorneys
  • Attend court proceedings
  • Conduct asset appraisals
  • Request personal or legal information
  • File tax returns
  • Distribute assets to beneficiaries

After the executor does their part, they can petition the court to close the estate and discharge the executor from duty.

What Does a Trustee Do?

A trustee administers a trust. The trustee will manage the assets put into the trust. When the time comes, the trustee can perform many of the same duties as an executor, but only as those duties involve the trust.

The trustee can invest assets and do other things with trust assets to make sure they stay viable until the time comes to distribute them. This is one reason many people name themselves as trustees.

The trustee will follow a trust agreement rather than the provisions of a will. The trustee will also make tax decisions and prepare records involving the assets in the trust.

The trustee’s job continues for as long as the trust remains. If a replacement is needed, the trustee can choose another to take their place, or the beneficiaries of the trust can request a new trustee.

The executor named in the will may become a trustee as well. For example, the will itself might say that a certain person should take over administering a trust. Thus, the executor and the trustee can be the same person.

How Do You Choose Executors and Trustees?

For both executors and trustees, you have to take care in who you choose. This person will handle your affairs after you pass. They will see to your beneficiaries and make sure your assets go toward the things you want them to go toward.

Your executor or trustee needs to be a responsible and clear-headed individual. This is especially true of trustees, as they must know how to manage your assets or at least know how to find the help they need to manage your assets.

It’s important that you have a will, and it’s just as important to consider a living trust. The two documents can coexist, and it’s worth having both. Furthermore, choosing the right people to administer these documents requires some deliberate thought.

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