We explain that what is the difference between executor and trustee with table. Many people want to be assured that their assets will be properly managed and distributed among the heirs after their death. Similarly, sometimes courts and various financial institutions may also want to manage people’s assets through an independent party for a specified period. executor and trustee
The executors and trustees are a group of people who take care of this challenging task. Although in both jobs related to asset management and disbursement, among others, the nature of these jobs is completely different.
The Essential Difference Between Executor And Trustee In 2021 executor and trustee
Executors and trustees are individuals selected by someone else to manage your estate after your death. Executors and trustees are very common, which can be misleading. Although they are separate roles, they could eventually be played by the same person. Below we review the essential differences:
- One of the basic differences between executor and trustee is how they are appointed: A trustee is appointed in a trust document, such as a living trust, to manage the estate of the person who passed away. The executor or personal representative is named in the last will, often called a will.
- The second big difference between the executor and the trustee is the process they must go through to liquidate an estate: Unlike executors, a trustee does not need to go through a probate process to liquidate an estate. It is because living trusts avoid probate court.
The difference between Executor and Trustee is that the executor follows the term of the will and distributes and transfers the property of the deceased person to the heirs, while the trustee follows the term of the trust document and supervises and maintains the asset of the designated trust.
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Comparison table between executor and trustee (in tabular form)
Comparison executing trustee parameter
|Sense||The executor is the one who administers the will of the deceased person.||A trustee is a person or group of people who manages assets for the benefit of others.|
|Appointed by||The local probate court.||Individual, court, or financial institution.|
|Should||Follow the term of the will as much as possible.||Follow the term of the trust as far as possible.|
|Working time||After the death of a person.||For charity, pension and retirement plans, trust, bankruptcy cases, etc.|
|Rate||In most cases, the executor does not charge a fee.||In most cases, the trustee accepts the agreed-upon fees.|
|Time of the work||Short.||Long.|
Who is the executor?
The executor is the one who administers the will of the deceased person. The main role of this person is to execute the last wishes and manage the financial affairs of the deceased person. Generally, anyone can appoint your executor before your death. In case he is not appointed before, the court or the testator can appoint him after his death. executor and trustee
To become an executor, the person must acquire a copy of the deceased person’s will. The executor must submit the photocopy of this will to the local probate court to obtain authority over this matter.
After becoming an executor, the person must keep the property until it is distributed to the heirs. During this period, you need to establish communication with other government agencies and inform everyone about the person’s death.
It is one of the principal duties of the executor to settle all payments and taxes owed from the deceased person. It also requires informing all close relatives of the death and making funeral arrangements. executor and trustee
Most of the time, this work is done by an attorney. But according to the law, anyone can become an executor. The person must be an adult and must not have a felony record. Most of the time (small cases), this work is done free of charge.
Who is a Trustee?
Under the legal term, a trustee is an individual or group of people who manages assets for the benefit of others. The trustee has legal title until the asset or property is delivered to the beneficiary. You also have the right to decide in the best interest of the beneficiary. By default, you get fiduciary responsibility to recipients.
There are several purposes for which an administrator can be appointed. Generally, they are designated for charities, pensions and retirement plans, trust funds, bankruptcy cases, etc. As the authorized person of the trust, the trustee’s primary duty is to manage all the assets of the trust. executor and trustee
The trustee must coordinate all tasks in accordance with the provisions outlined in the trust agreement. The trustee must also keep all transaction records and file taxes on time.
Although anyone can become a trustee, most of the time a financial manager does this job. However, the person must not have any conflict of interest for this job. In most cases, the trustee accepts the agreed-upon fees for this task.
Main differences between executor and trustee
- Under legal terms, an executor is someone who oversees the deceased person’s will; while the trustee is a person or a group of people who manages assets for the benefit of a third party.
- The executor must be appointed by the local probate court. However, a trustee can be appointed by an individual, a court, or any financial institution.
- An executor has to follow the term of the will and distribute and transfer the property of the deceased person to the heirs. On the other hand, the trustee’s primary duty is to follow the term of the trust document and supervise and maintain the asset of the designated trust.
- The executor begins his job after a person passes away to fulfill his will. However, the trustee can work for charities, pension, and retirement plans, trust funds, bankruptcy cases, etc. executor and trustee
- The duration of the work of the executor is short, while the duration of the work of the trustee can be extended.
- In most cases, the executor does not charge a fee for this task. On the other hand, the trustee’s work may be non-profit, but most trustees accept agreed-upon fees or salaries for this task.
Both executor and trustee jobs are quite challenging and require a good understanding of legal and accounting principles. The necessary part of this task is to communicate with various government agencies and settle various payments owed. The executor and trustee must pay all taxes and payments due on time.
This work is required to be handled impartially to be fair. The main objectivity of these works is to hold the assets for a certain period before they are disbursed to the third party. During this period, both the trustee and the executor remain liable for the asset. For this reason, it is considered a non-profit work. However, if the trustee or executor is required to manage a large property, then they can request a fee or salary. and trustee