The Difference Between a Trustee and an Executor

Even though trustees and executors have similar duties in that they are responsible for managing estate assets and distributing them among the beneficiaries, the nature of their jobs is different. Many testators appoint the same person as the trustee and executor. Both trustees and executors are entitled to be compensated for their work.

Trust administration in Sonoma County involves managing assets held in a trust. A trustee is appointed to administer the trust according to a legal agreement. Whereas, an executor distributes the testator’s assets according to their will after their demise. A trustee can take over the full duties of managing the testator’s assets without court intervention.

Once a trustee assumes their responsibilities, they get the right to take important decisions related to the estate (in accordance with the trust documents). A trustee does not receive trust assets unless they are a designated beneficiary and usually does not have the right to tweak the terms of the trust.

A trustee must act in the best interests of the beneficiaries, must not use trust assets for their own profit, and must act with reasonable care. Trustees have the right to take important decisions regarding investments, distributions of assets and capital use.

An executor is named in the will to manage the probate estate after the estate creator passes away. Unlike a trustee, an executor cannot assume their powers automatically and must obtain a court order to manage the estate.

If an estate creator had created a will during their lifetime, the executor must present it in a probate court along with a petition requesting it to start probate.

If a person dies without a will, the person responsible for managing their estate is referred to as an administrator.

An executor has two major responsibilities: to ensure that the estate is managed in accordance with the law and the wishes that the estate creator has set out in their will are carried out.

One of the first things that an executor does after assuming their responsibilities is to value the estate by assessing the assets and liability. This is done to determine if any inheritance tax is payable.

When an estate creator passes away, the executor notifies any parties that have been making payments to the estate creator about their demise.

Executors should open a separate account that should be used to manage estate-related financial transactions. The account should be functional until the decedent’s assets are distributed.

Before distributing an estate, the executor must obtain a grant of probate. Before any gifts are paid out, the executor must make sure that all outstanding debts are settled, liabilities are met, and estate assets are used to meet outstanding funeral expenses.

Johnston & Associates Law is a leading law firm in Sonoma County. Whether you want to create a trust or avoid probate, we can help. To make an appointment, call (707) 545-6542.