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How do estate executors differ from trustees?

On Behalf of | Jan 24, 2023 | Estate Administration |

Choosing someone to serve as the executor of your estate is likely a major part of your estate plans. If you are also considering the creation of a trust, you will need a trustee to manage it. You might wonder if an executor and a trustee are one and the same.

It is true that an executor and a trustee both act in a fiduciary capacity, meaning they have duties to beneficiaries. However, each position has different legal responsibilities.

The duties of an executor

You give your executor duties through your will. Your executor has the general duty to notify your heirs and creditors of your death and file your will with the probate court.

Other duties involve collecting and overseeing your estate assets, paying your outstanding debts, and distributing your property to your heirs. If you have remaining taxes, your executor will pay them as well.

The duties of a trustee

A trustee receives his or her responsibilities from a trust document, not a will. Since a trust contains property that you designate for beneficiaries, your trustee may have similar responsibilities as your executor. Still, your trustee will probably have obligations different than an executor.

For instance, you may want your trustee to invest your trust assets or perhaps sell them at a certain point. You might also stipulate that your beneficiaries receive trust money by meeting specific thresholds.

Giving someone both positions

It is possible to name someone as an executor and a trustee. Still, this could be a problem if the combined amount of duties overwhelms your choice. Also, investing both executor and trustee powers in a single person could provoke suspicion among family members, if not resentment.

Consider your options carefully in light of your priorities and the circumstances of your family.