Settling the estate of someone who recently passed away is a major responsibility that involves gathering and appraising all of the assets belonging to the estate, taking care of any outstanding debts and taxes, and ensuring that all heirs and beneficiaries receive the inheritance they’re entitled to. If you’ve spent any amount of time researching the estate settlement process, you may have noticed a couple of different terminologies. Specifically, you may have seen the terms estate trustee and estate executor used interchangeably. While these roles are all very similar, there are some key differences between an estate trustee and an executor that are worth pointing out.
An estate executor is someone who’s granted the legal authority to settle a deceased’s estate according to their will. An executor is usually also appointed in the deceased’s will, meaning that they will have hopefully had time to discuss the estate holder’s wishes and plans with them before the time to settle their estate comes.
Their responsibilities include submitting the will and applying for probate with the probate court, creating an inventory of the estate’s assets, taking care of debts and taxes, and distributing what remains of the estate to beneficiaries.
An estate trustee does basically the same job as an estate executor, but specifically focuses on trusts created by the deceased and recorded in their will. A trust is a legal entity that the deceased creates in their lifetime and uses to place assets from the estate there, so that the assets are no longer considered to be part of the estate, thereby reducing the need for probate and simplifying the estate settlement procedure.
A trust needs to be managed, of course, and that’s where the estate trustee comes in. The difference is that a trustee deals only with the assets in the trust, and is not involved in any other aspect of settling the estate. The trustee also must carry out their duties until the trust is dissolved. This could be before, during, or after an estate is settled. An estate executor’s responsibilities, on the other hand, end once the estate is settled.
Both trustees and executors must act in the best interest of the estate/trust and its beneficiaries. Their responsibilities are also outlined in the deceased’s will, and they must follow those instructions and keep notes and records of all transactions done on the estate’s/trust’s behalf.
Like the estate executor, a trustee is also usually named in the will and has, in the best case scenario, had ample time to discuss the deceased’s wishes and instructions with them before their passing.
Because of the overlap in these roles, it’s not uncommon for a will to name the same person as executor and trustee. Oftentimes, if the will also includes a trust, testators—those making the will—nominate the same person to manage both the assets in the estate and in the trust.
An estate executor is responsible for properly settling an estate according to the deceased’s will. This includes:
An executor also should be in close contact with beneficiaries so that they’re kept in the loop during a process that can often feel nebulous and confusing.
A trustee has very similar duties to an executor, with the main difference being that the trustee’s jurisdiction is limited to the trust. A trustee must also manage the assets in the trust and take care of them. So if real estate or vehicles are held in the trust, a trustee must ensure that the insurance rates and mortgages are still being paid, that the assets are well-kept, and that any necessary repairs are carried out.
Like an executor, a trustee must follow the instructions for the trust laid out in the will. If a trust is created to provide a monthly income to a beneficiary, the trustee must oversee the distribution of this income and ensure that the beneficiary receives the assets they’re entitled to. Similarly, a trustee must continue managing the trust until the trust is dissolved, as stipulated by the will. For example, if a testator created a trust that holds assets their child will be able to access once the child turns 18 years old, then a trustee must manage the trust until the child turns of age and the trust is dissolved.
An executor and a trustee can absolutely be the same person. In fact, this happens more often than you’d think. This is because entrusting someone to carry out the duties of settling an estate is no small feat, and families may choose to place the responsibility of managing both an estate and a trust with one person that has the testator’s full confidence, as opposed to splitting up the responsibilities and choosing someone who may not be up for the role.
The roles of estate executor and estate trustee are challenging and require a lot of patience, attention to detail, and emotional endurance. Finding the right person for this role is crucial for you and your family. That’s why we want to help in any way we can. Whether it’s finding the right executor, determining whether a trust is best for you and your family going forward, or simply lending a guiding hand when it comes to estate planning, we’re here for you. Get in touch today for a free consultation.
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