Are you in the process of planning your estate?
Estate planning is one of the best things you can do for your family because it ensures they’ll have everything they need if something happens to you. If you pass away with no will or estate plan, your family could have long legal battles ahead of them.
However, putting together an estate plan on your own isn’t easy, as there are many different details to consider. One of the main questions you might have is, “what is the difference between an executor and a trustee?”
Keep reading to learn the answer to this question and more before you start planning your estate.
What Is the Difference Between an Executor and a Trustee?
When you are creating your will or trust, you will need to name both an executor and a trustee. If you’re nominating this person, or you’ve recently been named one of these rolls by a friend or relative, you’ll need to know the difference.
An estate plan executor is responsible for managing or executing a person’s final wishes and settling the estate.
A trustee is the legal owner of all trust assets, so they are responsible for managing assets in a trust. See here how a trust works and how it’s different from other elements of an estate plan.
Both of these positions involve a lot of legal duties, so if you don’t feel like you can handle the job, or you think the person you want to name might need help, you can hire a professional to help execute final wishes.
Common Executor Guidelines
The executor of an estate will have many different jobs depending on the specific asks of the person and how significant and complex their estate is. Some duties will include:
1. Distributing assets to the proper beneficiaries and managing all affairs for the estate, including paying debts or having assets appraised.
2. Filing final taxes for the estate and contacting the appropriate government institutions
3. Act as a legal representative for the estate in all court proceedings if they are necessary.
Common Trustee Guidelines
A trustee operates in a similar role as an executor. They will have many different legal duties and act as an essential liaison between the trust and its beneficiaries. Some typical responsibilities for trustees include:
1. Communicating with the beneficiaries of the trust and answering all of their questions about the estate. You will have to issue important documents to beneficiaries, such as yearly tax reports.
2. Making important decisions about the trust, including potentially withholding from beneficiaries.
3. Investing in any trust assets and ensuring the trust is administered according to terms set by the person who has passed.
Learn More About Estate Planning
There are many details to consider when you’re planning your estate and answering the question, “What is the difference between an executor and a trustee?” is just the beginning.
But estate planning doesn’t have to be a long and complicated process. If you have more questions about estate plans, wills, trusts, executors, trustees and more, make sure you check out the rest of our website for some helpful information.