Estate Executor Duties
An executor, sometimes called a personal representative, is the person who is named in a will, appointed by the court, and responsible for performing under the terms of the will and handling the estate. The laws vary by state, and an executor may work under court supervision or may be able to do what’s called an “independent” administration for an unsupervised probate.
Normally the executor must qualify with the court and if no one objects, the court will issue letters testamentary which authorize the executor to gather the estate’s assets, open an estate bank account, prepare an inventory, prepare accountings for the court, sell assets, resolve all claims, and pay creditors. An executor is ultimately responsible for ensuring that all obligations have been paid before distributing estate assets to the beneficiaries in accordance with the terms of the will. If there is no will, then the executor will distribute assets as required under state law. Final distribution of the estate’s assets can only happen after all legitimate debts, taxes and other expenses are paid, all claims are resolved, and the court authorizes distribution to the beneficiaries.
Trustee’s and Successor Trustee’s Duties
A trustee, on the other hand, is an individual or trust company named in a trust document and is in charge of the assets that are held in a trust. Assets held in a living trust do not go into probate, which means that court supervision is typically not required. In most revocable living trusts, the owner of the trust is in complete control and acts as the trustee as long as they are alive and well. They can make changes to the trust provisions, control all trust assets, change trust beneficiaries, or even revoke the trust entirely if they decide it is no longer needed. If the owner of the trust is no longer able to manage their affairs as a result of cognitive impairment or another injury, the “incapacity trustee” they have named will step in and handle the trust for the benefit of the owner. Upon the trustee owner’s death, the successor trustee will distribute the assets held in the trust to the named beneficiaries and subsequently close down the trust, similar to an executor, but without the burden of court ordered probate.
You may choose to have more than one trustee or executor. Generally, it is better to name a sequence of trustees or executors rather than joint ones. The executor and successor trustee can be the different people, but do not have to be. There are advantages and disadvantages to each decision and your plan will depend upon your unique family situation, the assets you own, and how those assets are titled. To avoid significant problems, it is important to discuss every decision involving will or trust based planning with an experienced estate and trust administration attorney.