What is the difference between an Executor and a Trustee?
When it comes to having your estate planning documents prepared, you will need to make a lot of decisions on who you believe is best suited to serve in different roles. Two important roles that are often confused are Executor and Trustee.
An Executor is nominated in your will to windup your final affairs after you pass away. An Executor has no authority while you are living, only takes control of your property after your death, and only after he or she has been officially appointed by the Probate Judge in your county. Once your Executor is appointed by the Judge, he or she is required to inventory everything you own and submit that inventory to the Court. The Executor then pays your creditors and expenses, and then will ultimately distribute the remaining assets according the terms set forth in your will. An Executor’s actions are controlled by the Court and the law, with very little room for exercising any discretion. An Executor’s role normally takes anywhere from 6 to 18 months and then his or her job is done.
A Trustee is appointed in your trust document and can serve during your lifetime, after you pass away, or both. Normally, a Trustee is not appointed by a judge, but is given their authority from the terms of the trust document that appointed him or her. The trust document can be viewed as an instruction book for the Trustee. The Trustee holds and manages the trust property for the beneficiaries of the trust as set forth in the trust document. A Trustee can also be granted a great deal of discretion on when and how distributions from the trust will be made. A Trustee may serve for a relatively short period of time if the trust document says to distribute all of the assets to the beneficiaries, or the Trustee could serve for many years if your trust document says to hold the assets in trust until your son or daughter reaches a certain age, such as age 30.
Both Executors and Trustees serve very important roles when settling an estate and choosing the right person for the job is very important. Many people appoint the same person to serve as Executor and Trustee, while other people like the checks and balances of having different people serve in different roles. Whichever approach you choose, an experienced estate planning attorney can guide your through the decision-making process.
Paul Kellogg is an attorney in Cincinnati with the Phillips Law Firm, Inc. Paul’s practice focuses on providing comprehensive estate planning and probate services to families and business owners, as well as serving as outside general counsel to entrepreneurs, real estate investors and businesses where he provides guidance and advice on a wide variety of transactions and disputes. He can be reached at (513) 985-2500 or via email at [email protected]. Please explore Paul’s other articles on estate planning, real estate and business on the Phillips Law Firm Blog page.
The article is for educational and informational purposes only and does not constitute legal advice. Anyone contemplating taking legal action is urged to obtain proper legal advice from an attorney licensed in your particular jurisdiction.