Executor, Trustee: What's the Difference?
An executor is the person either appointed by the court, or nominated in someone's Will, to take care of the deceased person's financial affairs. In some states, this person is called the personal representative.
If there's a probate court proceeding, the court officially appoint someone--usually, the personnamed in the deceased person's sill--as executor. The court gives the executor a document granting authority to administer the estate, which is called letters testamentary in most states.
If there's no probate proceeding (because the estate is too small to require one), then the person named as executor still takes care of things, but doesn't have official authority from the court. If required, the executor can provide a copy of the deceased person's will and a document stating that there is no probate pending in the state. Click here to read about the small estates procedure in $state.
Here are the sort of things an executor does:
- Secure and organize the deceased person's property, including a house and furnishings.
- Make an inventory of what's in the estate.
- Value the assets in the estate.
- File the deceased person's last tax returns (and any back taxes)
- Pay the deceased person's remaining bills.
- If there's a probate, work with the estate's attorney to give the court the information it requires.
- Ultimately, distribute the estate's property to the beneficiaries or heirs.
A trustee is the manager of the property held in a trust. The successor trustee is the person named in the trust document to take over the job of managing the trust after the person who established it, the grantor, dies or is unable to continue as trustee.
Here are the sort of things a trustee does:
- Identify and gather all of the trust's assets.
- Appraise or otherwise value the trust's assets.
- Notify heirs and beneficiaries as required by state law.
- Pay the trust's bills.
- Get a tax identification number for the trust.
- File the trust's tax returns, if required.
- Ultimately, distribute the assets held in trust to the trust's beneficiaries.
Often, the trustee and the executor are the same person. But that doesn't mean there's no difference in their jobs. In practice, it boils down to this: If an asset is held outside of a trust, in the decedent's individual name, then the executor is in charge of it. If an asset is held in trust, then the trustee's in charge.
For example, if the Kate S. owned a brokerage account and transferred it to the trust before she died, the account's official legal owner would be "Kate S., as Trustee of the S Family Trust." After Kate's death, the successor trustee would be able to continue managing that account after giving the company a copy of Kate's death certificate and a copy of the trust document. But if Kate had never transferred that account into her trust, and it was owned in her name alone, it would be the executor's job to deal with that account, not the trustee's.