Search Your Query Here

What's the Difference Between a Trustee and an Executor?

A trustee and executor play integral roles in the industry of estate planning. There is usually a lot of confusion between these two. People usually try to dig into what's the difference between a trustee and an executor when they have to determine a legal medium to pass on their assets to their loved ones. Therefore, it is important to clarify the difference between the two, to make a smart decision.

Let’s dig into the details.

Roles of Trustee vs. Executor
Trustee and executor are hired by a person, to handle their assets and estate planning, after the individual passes away. They both have very similar roles.

In some states, executors are referred to as “personal representatives.” Thus, if someone uses this term for executors, it is best to know both the terms, to avoid confusion.

Both the trustee and the executor, help in settling out debts and manage distribution of assets to the heirs of the deceased individual. This process is also known as “settling an estate.” Estate basically refers to property, money and other assets that a person owned at the time of his death.

Difference between Trustee vs. Executor
The biggest difference between the two on how they are appointed.

A trustee is appointed to handle a trust document of a person who has died. On the contrary, an executor is appointed to manage the last will or testament.

Another difference between the two is the process through which they are appointed.

Responsibilities; Trustee vs. Executor
To understand the difference between the two, it is important to have a look at the responsibilities of them individually.

Your last will state how your assets will be distributed to your heirs after you die. You also mention the name of your executor in your last will as he/she will be the person who settles your will correctly. They are responsible for handling all the issues that might arise with the creditors. There will be objections from the heirs too and transferring the property might have issues too. Thus, all of this is managed by the assigned executor.

On the other hand, a trustee is responsible for managing your living trust. People who want to avoid putting their family members through the hardships of probate court, should opt for living trust. If you choose living trust, instead of a will then you will appoint a trustee to manage it all for you. Also, a trustee doesn’t have to go to the probate court as the Living Trust avoids it completely.

The roles of an executor and trustee are somewhat similar, but the way they are appointed is different.

An executor and trustee have similar roles and responsibilities as they have to handle the estate. The major difference is that a trustee is appointed for a Living Trust and an executor is appointed for managing your Last Will.