An executor manages a deceased person’s estate, ensuring debts are settled and assets are distributed according to the will. A trustee oversees a trust, handling asset management and distribution per the trust’s terms, often without probate court involvement.
By Brad Nakase, Attorney
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The person designated to oversee the affairs of a deceased person’s estate and implement their final will is known as an executor. They are chosen by either the person who leaves a will or the court. The role of the executor is to verify the accuracy of the will and to distribute its assets to the designated beneficiaries. Real estate, direct investments, monetary assets (such as stocks and bonds), and collectibles are all examples of assets.
A friend, relative, or professional (such as an accountant or lawyer) must be at least 18 years old and free of criminal convictions to serve as executor. Among the executor’s responsibilities are:
The role of an executor in an individual’s or a beneficiary’s estate plan is crucial. The process of preparing for the administration and distribution of one’s assets after death is known as estate planning. People prepare their estate plans for many different reasons, such as to ensure that their loved ones continue to enjoy their wealth after their death, to support their children and spouses financially, to leave a lasting gift to a worthy cause, or to fund education. Key responsibilities in estate planning involve:
An executor can delegate a lot of responsibility to an estate lawyer. Nonetheless, the estate will have to pay the attorney’s fees. The estate might hire a certified public accountant or other tax preparer to complete the last income tax return of the deceased. The executor is responsible for paying any taxes due before distributing assets to beneficiaries.
Furthermore, estates are subject to death taxes in a number of states.
Even though the heirs are anxious to get their hands on their inheritance, the executors must explain that they cannot do so until all claims against the estate have been addressed.
The two positions are comparable; however, a trustee is accountable for a trust, and an executor is responsible for carrying out a will, typically with the oversight of a probate court. They need not be the same person, though in certain instances they may be.
Could a person serving as an executor also stand to gain financially from the will?
It is rather common for the executor of a will to also be one of the beneficiaries.
To safeguard the assets placed in a trust, one must appoint a person to serve as trustee. A trustee’s job is to oversee a trust’s financial affairs and make sure everything is running smoothly according to the instructions provided. Until their incapacity or death prevents them from fulfilling the function, the person who forms the trust often serves as the trustee. A Successor Trustee assumes control thereafter. Tasks may include keeping track of revenue and expenditures, distributing assets to beneficiaries, reporting and paying taxes on the Trust’s income, and documenting any other transactions that may arise.
A trustee is simply the designated individual responsible for overseeing the management of a trust’s assets.
As a Trustee, your first and foremost responsibility is to look out for the Trust’s best interests. It is essential to select a Trustee who can set aside their own interests and carry out the Trust’s directives without question when making this appointment.
It could be difficult to choose the best Trustee. There is a lot of pressure to “get it right,” which may be especially overwhelming if you have children whom your Trust will support.
However, you may get greater assurance in your choice by considering the following points. Your Trustee can be someone you trust as long as they are 18 or older.
Though they serve in different capacities, a trustee’s primary responsibility is to carry out the will of the trust. Preserving your legacy is the end aim of any trust. To answer the questions “what is the duty of a trustee?” or “what does a trustee do?” it is helpful to keep in mind that the position encompasses a wide range of responsibilities. A trustee’s duties may include any or all of the following:
Over time, a Trustee’s responsibilities may evolve as well. You often have more leeway in deciding what you can and cannot do as the Trustee and beneficiary when you establish a trust. It stands to reason, given that you are ultimately accountable to no one but yourself. The individual you choose as Successor Trustee will assume responsibility in the event of your incapacity or demise.
The answer is yes, in most cases, a Trustee can face personal liability. He or she is responsible for making choices that are in the best interest of the beneficiaries and the Trust. In order to safeguard themselves, trustees should maintain precise and comprehensive records of all financial dealings and payouts. Furthermore, a Trustee should do their utmost to fully comprehend and adhere to the Trust’s directives.
To put it simply, a beneficiary is not the same as a Trustee. A Trustee oversees the Trust and distributes its benefits to a beneficiary. A beneficiary, usually a child or other family member, is the intended recipient of a trust. The trustees are in charge of the trust’s assets, making sure they’re well-managed, and distributing them to the beneficiaries when the time comes.
The person appointed as the Trustee’s second-in-line successor is known as a Successor Trustee. Typically, the creator of the Trust continues to serve as Trustee until their incapacity or death makes them unable to do so. The Successor Trustee then becomes involved. It is advisable to appoint a backup Successor Trustee in the event that the first nominee becomes incapacitated or otherwise unable to fulfill their duties.
As long as they are prompt and follow the Trust’s instructions, a Trustee can almost have as much time as they need to settle a Trust. Final settlement and distribution of assets typically takes 12–18 months for most trusts. The time required to finalize a trust is often six months or more. How long it takes is heavily dependent on the complexity of the Trust, the necessary provisions, and the age of the beneficiaries. It is possible to keep a trust in place for the benefit of a minor until that minor reaches a specific age.
As part of their “fair pay” for carrying out their responsibilities, a Trustee receives a salary. Sometimes (although not often), the Trust will specify the appropriate amount to pay the trustee out of the assets of the Trust.
To perform a good job as a Trustee, one must be familiar with the duties and obligations that come with the position. No one can do a good job at a task unless they know exactly what is required of them.
Ultimately, the difference between a trustee and an executor boils down to the difference between a trust and a will. A Trustee is someone who oversees the administration of a trust, managing and distributing the assets inside the trust according to the instructions given by the trust. An executor is someone who makes sure that a person’s last will is correctly executed, according to the terms and desires of the deceased. Distribution of assets, payment of taxes, and settlement of debts are common tasks that fall under this category, often under the supervision of the probate court.
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