What’s the Difference Between a Trustee and an Executor?
When it comes to estate planning, two terms that are commonly used are trustee and executor. While both positions are related to managing a person’s assets, they have different roles and responsibilities. It is important to understand the differences between a trustee and an executor to ensure that your estate plan is structured properly.
Definition and Roles
A trustee is a person who is designated to manage and distribute the assets of a trust, while an executor is tasked with administering a will. A trust is a legal arrangement that allows a person to transfer their assets to a trustee, who then manages those assets for the benefit of beneficiaries. An executor, on the other hand, is responsible for carrying out the wishes of a deceased person as spelled out in their will. In short, a trustee handles a living person’s assets while an executor handles an estate after someone has died.
Legal Authority
One of the key differences between a trustee and an executor is their legal authority. A trustee can begin managing a trust as soon as it is established while an executor can only begin their duties after the estate owner passes away. Trustees typically have broad powers to manage the trust, subject to the terms of the trust agreement, while executors are limited to administering the estate based on the terms of the will.
Responsibilities
While both trustees and executors have fiduciary responsibilities to manage assets in the best interests of the beneficiaries, their responsibilities often differ. Trustees are responsible for managing the assets in the trust, paying any applicable taxes, and distributing assets to the beneficiaries according to the terms of the trust agreement. Executors, on the other hand, must identify and inventory assets, pay any debts or taxes owed, and distribute assets to the beneficiaries as specified in the will. Executors also have to ensure that the will is legally valid through the court system.
Timeframe
Another key difference between a trustee and an executor is the timeframe during which they carry out their duties. A trustee’s responsibilities can extend long past the death of the trust’s creator and may last for many years, while an executor’s responsibilities typically end once the estate is closed. Trustees may also be responsible for ongoing management of the assets, while an executor’s duties typically end once the estate is probated.
Qualifications
While both trustees and executors have fiduciary duties, they may have different qualifications. A trustee should have experience handling investments and managing assets as well as the ability to work well with beneficiaries and communicate effectively. An executor, on the other hand, should be familiar with financial and tax matters as well as have the ability to manage an estate and communicate with family members and beneficiaries. It is also important to note that an executor may need to be appointed by the court, while a trustee can be selected by the trust’s creator.
Compensation
Trustees are usually compensated based on a percentage of the trust’s value, while executors are typically paid a fee based on the estate’s value. California Probate Code governs the fees to executor and attorneys who represent the executor. It is important to know this information so you can make informed decisions.
Contact Desert Law Group in Palm Springs Today to Get Started!
While both a trustee and an executor have important roles in estate planning, they have different responsibilities and legal authority. Understanding the differences between the two positions is essential to ensure that you have a comprehensive estate plan that meets your needs. Whether you are creating a trust or a will, it is important to work with experienced estate planning attorneys to ensure that your wishes are properly structured and carried out.
The team at Desert Law Group in Palm Springs is committed to helping you achieve your estate planning goals and providing personalized service and support every step of the way. Please contact us at (760) 481-1144 to learn more and to enlist the services of estate planning attorney, Kimberly T. Lee at Desert Law Group in Palm Springs, Palm Desert, Rancho Mirage, Indian Wells, and La Quinta!
