What is the difference between a trustee and executor?

The executor and trustee are both fiduciaries, but they have a legal obligation to different things.

Elissa

Published February 26, 2021|3 min read

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KEY TAKEAWAYS

  • Executors and trustees have separate powers and duties

  • The executor handles estate administration by following a will, while the trustee handles trust administration in accordance with a trust agreement

  • An executor can be a trustee and vice versa

An executor and trustee are both fiduciaries in an estate plan, but they have a legal obligation to a different set of interests. The trustee has a fiduciary duty to a trust and is responsible for distributing trust assets, while the executor manages an estate and distributes estate assets according to the last will and testament of the deceased. The person who creates a will or trust can appoint someone — the same person even — to fulfill these duties and if they don't a probate court will name someone.

A will is a written legal document that states who receives assets, and a trust is a separate legal entity that holds assets for beneficiaries. People often choose to create both as part of their estate plan, since wills and trusts have different advantages and can work in conjunction with each other.

Executor’s role in estate planning

The executor of the estate handles the affairs of a deceased person (decedent), by carrying out the terms of the will.

The executor’s duties, at a glance, are to:

  • Notify beneficiaries (will readings not required) and creditors

  • File the will with probate court

  • Choose what type of probate procedure to use and determine whether the estate can avoid probate

  • Collect and manage estate assets

  • Assess the value of the decedent’s estate

  • Ensure that debts are settled or paid 

  • File and pay the decedent’s taxes and estate tax

  • Distribute assets to will beneficiaries

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Before any beneficiaries can receive their inheritance, there are a number of things the executor must do as part of estate administration — like overseeing probate. The probate process can be lengthy and complicated: while a small estate may be easily administered, a more complex estate may require court supervision and a probate lawyer

See also: Does a will have to be probated

An executor is integral in navigating probate and making decisions on behalf of the estate, and when there is no named executor (or no will), someone will still need to perform the executor’s duties. 

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Trustee’s role in estate planning

Trusts operate separately from a will, so the person managing the trust — the trustee —  has different duties. A trustee must follow the rules set out by the person who created the trust, called the grantor, and their main job is to distribute trust assets to beneficiaries (outside of probate). But they have other duties, too, which may become more varied with the terms of trust. A trustee can:

The trustee can be a family member, friend, an attorney, or a corporate trustee, like a bank or trust company. Additionally, the grantor can serve as trustee if the trust is revocable — but not if it’s irrevocable. (Read more about a revocable vs irrevocable trust.) 

When the trustee dies or is unable to carry out their duties, a successor trustee assumes the responsibilities. Make sure you name one in your trust document 

You can create a trust and revocable living trust that work together with Policygenius.

Can an executor and trustee be the same person?

You can appoint the same person to be trustee and executor. For example, you could appoint an estate attorney to fulfill both roles. If you’re creating a testamentary trust through your will, you can state that the executor should also be the trustee. A trustee/executor may even have an advantage, since they will be equipped with broad knowledge of your estate and assets. However, entrusting one person, especially a family member, with too much power could upset other loved ones so keep that in mind when choosing your trustee and executor. 

Trustees and executors can also be beneficiaries, which might create potential conflicts if they can't maintain an impartial interest when there are additional beneficiaries. 

Learn more about a beneficiary vs trustee.

Every state law has requirements as to who can serve as executor or trustee. For example, fiduciaries typically need to be the age of the majority, and some states may have additional requirements for out-of-state executors. Consult an estate attorney if you have more questions.

See also: how to make a will in my state.

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