An executor and a trustee play very large and important roles in your estate plan. But what’s the difference between an executor and a trustee? Knowing what their roles are can help you make better choices for these positions.
An executor is the person you name in your will to carry out the wishes in your will. Upon your death the executor will hire an attorney to enter your will into the probate court of the county in which you were living at the time of your passing. Ideally, for the sake of ease, this person will live nearby, but they don’t have to. In the probate process, this person will go to court when needed. There’s usually only one court hearing needed if you have a properly written will, because the probate process is so efficient in Texas. But there are exceptions.
The executor will also do things like appraise or get appraisals for assets in your estate. They will pay off debts and work with creditors of the estate if there are any, and then they will distribute the remaining assets per the terms of your will. They’ll also file any necessary tax returns for the estate.
Without a doubt, an executor needs to have at least a certain level of abilities to handle these important tasks. A good probate attorney can help guide them through the process, but the executor still needs to be able to stay on top of things and fulfill their duties. Otherwise, the estate could turn into a big mess which is not good for your loved ones. So choose your executor wisely.
The same goes for choosing a trustee. If you have a trust as part of your estate plan, then you will choose a trustee to administer the trust per the guidelines set out in the trust. A trust can be a living trust that exists during your lifetime. Or it may be a testamentary trust which is a trust that is written into your will and ‘springs to life’ upon your death.
Like the executor who manages the assets of your estate, the trustee manages the assets that are put into the trust. This person will need to have the skills to make investment decisions and to do whatever else that is needed to help protect the assets in the trust. This person will also need to make sometimes difficult decisions for when to make distributions to the named beneficiary or beneficiaries, again per the guidelines of the trust. Unlike the executor whose role is typically relatively short-lived, the role of a trustee lasts as long as the trust is in place. This could be several years. Sometimes the trust lasts so long that new trustees will need to be named later on to finish the job.
Having said all of this however, sometimes people will name the same person to be the executor of their will and the trustee of any trusts they may create. This is especially true if the trusts are testamentary trusts for their children. Again though, you should choose wisely for these roles, because they will play an incredibly important part of your overall estate plan. Think about their individual skill sets, and keep in mind the logistics that would be required. For example, it’s harder to perform these roles if the person lives far away. And it’s wise to talk to the people you are thinking about naming for these roles ahead of time to make sure they are willing and able to take on the roles when needed.
