An executor and trustee are both fiduciaries in an estate plan, but they have a legal obligation to a different set of interests. The trustee has a fiduciary duty to a trust and is responsible for distributing trust assets, while the executor manages an estate and distributes estate assets according to the last will and testament of the deceased. The person who creates a will or trust can appoint someone — the same person even — to fulfill these duties and if they don't a probate court will name someone.
A will is a written legal document that states who receives assets, and a trust is a separate legal entity that holds assets for beneficiaries. People often choose to create both as part of their estate plan, since wills and trusts have different advantages and can work in conjunction with each other.
Executor’s role in estate planning
The executor of the estate handles the affairs of a deceased person (decedent), by carrying out the terms of the will.
The executor’s duties, at a glance, are to:
Notify beneficiaries (will readings not required) and creditors
File the will with probate court
Choose what type of probate procedure to use and determine whether the estate can avoid probate
Collect and manage estate assets
Assess the value of the decedent’s estate
Ensure that debts are settled or paid
File and pay the decedent’s taxes and estate tax
Distribute assets to will beneficiaries
Before any beneficiaries can receive their inheritance, there are a number of things the executor must do as part of estate administration — like overseeing probate. The probate process can be lengthy and complicated: while a small estate may be easily administered, a more complex estate may require court supervision and a probate lawyer.
See also: Does a will have to be probated?
An executor is integral in navigating probate and making decisions on behalf of the estate, and when there is no named executor (or no will), someone will still need to perform the executor’s duties. This person is called the administrator.
Trustee’s role in estate planning
Trusts operate separately from a will, so the person managing the trust — the trustee — has different duties. A trustee must follow the rules set out by the person who created the trust, called the grantor, and their main job is to distribute trust assets to beneficiaries (outside of probate). But they have other duties, too, which may become more varied with the terms of trust. A trustee can:
Manage trust assets
Make investment decisions for the trust
Sell trust property as instructed
Withdraw money from a trust on behalf of a beneficiary with certain types of trusts
File and pay trust taxes
Keep accounting records and provide them to beneficiaries
The trustee can be a family member, friend, an attorney, or a corporate trustee, like a bank or trust company. Additionally, the grantor can serve as trustee if the trust is revocable — but not if it’s irrevocable. (Read more about a revocable vs irrevocable trust.)
When the trustee dies or is unable to carry out their duties, a successor trustee assumes the responsibilities. Make sure you name one in your trust document.
Can an executor and trustee be the same person?
You can appoint the same person to be trustee and executor. For example, you could appoint an estate attorney to fulfill both roles. If you’re creating a testamentary trust through your will, you can state that the executor should also be the trustee. A trustee/executor may even have an advantage, since they will be equipped with broad knowledge of your estate and assets. However, entrusting one person, especially a family member, with too much power could upset other loved ones so keep that in mind when choosing your trustee and executor.
Trustees and executors can also be beneficiaries, which might create potential conflicts if they can't maintain an impartial interest when there are additional beneficiaries.
Learn more about a beneficiary vs trustee.
Every state law has requirements as to who can serve as executor or trustee. For example, fiduciaries typically need to be the age of the majority, and some states may have additional requirements for out-of-state executors. Consult an estate attorney if you have more questions.
See also: how to make a will in my state.
