When a person dies, their estate is transferred to a fiduciary responsible for managing and distributing the assets by the will or state law. The two most common fiduciaries are executors and trustees. While both have the authority to manage the estate, some critical distinctions exist between their roles. This article will outline the duties of each and discuss which one has more authority.
What is an executor, and what is a trustee?
An executor is a person appointed by a will to administer the deceased’s estate. They are responsible for gathering and managing assets, paying debts and taxes, and distributing what is left to the beneficiaries. A trustee is appointed by state law or court order to manage the property of a minor, an incapacitated person, or an insolvent person.
What are the duties of an executor?
An executor has four primary duties:
- To inventory and appraise the estate’s assets;
- To pay valid debts and taxes of the estate;
- To distribute what is left to the beneficiaries; and
- To wind up the estate affairs.
What are the duties of a trustee?
A trustee has several duties, which include:
- To manage and protect the trust property;
- To make decisions in the best interests of the beneficiaries;
- To keep accurate records and account for all transactions;
- To comply with tax laws; and
- To transfer the trust property in accordance with the conditions of the trust.
Which one has more authority?
While executors and trustees have authority to manage estate assets, executors have more authority because they will appoint them. They have a legal mandate to carry out the deceased’s wishes. On the other hand, trustees are often appointed by a court or state law. Their primary duty is to the beneficiaries, not the deceased. It means that they may have to deviate from the wishes of the deceased to protect the interests of the beneficiaries.
When should you choose an executor, and when should you choose a trustee?
If you are creating a will, you should appoint an executor. After you die, this individual will be in charge of carrying out your desires. If you are creating a trust, you should appoint a trustee. This person will be responsible for managing the trust property and making decisions in the best interests of the beneficiaries.
An executor is a person appointed by a will to administer the deceased’s estate. In contrast, a trustee is appointed by state law or court order to manage the property of a minor, an incapacitated person, or an insolvent person. Executors have more authority than trustees because they are appointed by the will and have a legal mandate to carry out the deceased’s wishes.
Trustees may have to deviate from the wishes of the deceased to protect the interests of the beneficiaries. When creating a will, you should appoint an executor. When creating a trust, you should appoint a trustee.
What happens if there is no executor or no trustee appointed in your will or trust document?
An executor or trustee is a vital fiduciary who will help to ensure that your estate is managed and distributed according to your wishes. If you are unsure about which one to choose or have questions about their role, you should speak to an experienced estate planning attorney. They can help you understand the duties of each and make sure that your documents are in order.
How much does it cost to appoint an executor or a trustee, and who pays these fees?
There is usually no cost to appoint an executor or trustee. However, they may be entitled to compensation for their services. It will be specified in your will or trust document. The estate will typically pay these fees.
If you are creating a will or trust, it is vital to choose someone you trust to fulfill your wishes. An executor or trustee is a fiduciary with the legal authority to manage your estate according to your wishes. They can help to ensure that your assets are distributed according to your desires and that your beneficiaries are protected. Speak to an experienced estate planning attorney if you have questions about appointing an executor or trustee. They can help you understand the duties of each and ensure that your are in order.
What happens if there is a disagreement between the executor and the trustee?
If there is a disagreement between the executor and trustee, it is vital to resolve the issue as quickly as possible. The estate’s beneficiaries could be adversely affected if the executor and trustee cannot work together. You may need legal assistance if you cannot resolve the issue. An experienced attorney can help you understand your options and ensure that the beneficiaries’ interests are protected.
Conclusion
It is essential to know what an executor cannot do and to choose the right person for the job. Executors have more authority than trustees, but trustees may have to deviate from the wishes of the deceased to protect the interests of the beneficiaries. If you create a will or trust, speak to an experienced estate planning attorney to ensure that your documents are in order.
