{"id":46284,"date":"2023-06-06T09:42:54","date_gmt":"2023-06-06T16:42:54","guid":{"rendered":"https:\/\/ameriestate.com\/?p=46284"},"modified":"2023-06-01T09:43:25","modified_gmt":"2023-06-01T16:43:25","slug":"trustee-vs-executor-whats-the-difference","status":"publish","type":"post","link":"https:\/\/ameriestate.com\/estate-planning\/trustee-vs-executor-whats-the-difference\/","title":{"rendered":"Trustee vs Executor: What’s the Difference?"},"content":{"rendered":"
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\"Trustee<\/a><\/figure><\/div>\n\n\n

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If you are wading into the estate-planning process<\/a>, you might be overwhelmed by the decisions you must make. It can be a complex endeavor and having to understand the numerous documents and terminology involved doesn\u2019t make it any easier. One of AmeriEstate\u2019s roles is helping people understand an estate plan's structural and legal aspects to reduce confusion and make it easier to navigate the process.<\/p>\n\n\n\n

We often find that people don\u2019t understand the differences between terms involving wills and trusts. If you are in this position, don\u2019t worry; you aren\u2019t alone. We are here to clear things up for you and discuss the role of trustee vs. executor.<\/p>\n\n\n\n

Defining the Key Differences Between Trustee vs. Executor <\/h2>\n\n\n\n

Let\u2019s begin by pointing out what these two roles have in common. Both are fiduciaries, meaning they are legally responsible for handling another person\u2019s affairs while placing that person\u2019s best interest over their own. Any time you appoint someone to manage your assets, that individual should act in your and your beneficiaries\u2019 best interests. The second similarity is that both are responsible for some aspect of your estate after you pass.<\/p>\n\n\n\n

Trustees and executors fulfill similar responsibilities, but trustees deal with trusts, while executors work with wills. When you appoint a trustee, they manage the trust for you and your beneficiaries when you are alive. After you pass, they manage and distribute the trust to your heirs according to the specifications you establish in the trust. Once asset distribution is complete, the trust term ends or the trust is revoked, the trustee\u2019s job is finished.<\/p>\n\n\n\n

If you create a will, you should appoint an executor. The executor is responsible for moving your will through probate when necessary and distributing your assets according to the directives you provide in the will. One difference between a trustee vs. executor is when their roles begin. An executor\u2019s job doesn\u2019t start until after you pass, and it ends after they finish distributing assets or the court releases the case.<\/p>\n\n\n\n

Understanding the Role of a Trustee<\/h2>\n\n\n\n

Now that we\u2019ve covered the basics, let\u2019s dive deeper into each role, revealing more about what differentiates a trustee from an executor. A trust<\/a> is a legal arrangement that protects your beneficiaries from the time, cost and emotional stress of dealing with probate court before receiving their inheritances.<\/p>\n\n\n\n

When you set up a trust, you may see the term trust administrator and wonder about what a trust administrator vs. trustee is. There isn\u2019t one. You can use the two terms interchangeably, but we tend to use trustee, as it is the word most people are familiar with.<\/p>\n\n\n\n

When Do You Appoint a Trustee?<\/h3>\n\n\n\n

When you create a trust, you name both the trustee and the beneficiaries. You can choose an individual or an entity to act as your trustee. You can appoint yourself as a trustee while you are still alive. However, you shouldn\u2019t wait to identify who will take over the role after you pass.<\/p>\n\n\n\n

The role of a trustee vs. executor is more involved. Letting a trustee handle the trust from the beginning removes the burden of duties from your shoulders while still allowing you to have a hand in deciding how to manage the trust.<\/p>\n\n\n\n

What Does the Trustee Do?<\/h3>\n\n\n\n

Regardless of whether your appointed trustee begins the job before you pass or after, they manage the assets in the trust and settle your estate after your death. To that end, they handle the trust\u2019s investment portfolio, maintain trust records, oversee bank accounts and pay any bills associated with the trust.<\/p>\n\n\n\n

Managing the assets also includes filing tax form 1041<\/a>. The trustee may need to pay capital gains taxes on the income if investments result in gains. The trustee also maintains insurance on the relevant properties when assets involve property or vehicles.<\/p>\n\n\n\n

In comparing a trustee vs. executor, the trustee\u2019s roles include direct handling of financial affairs even when you are alive, whereas executors never complete these duties until after your death. Other jobs often include:<\/p>\n\n\n\n