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Understanding How the Role of a Trustee Differs From the Role of an Executor

After your loved one passes away or becomes incapacitated, you may find yourself struggling to understand the various roles of those involved in the administration of the estate. People often confuse the two terms “executor” and “trustee,” using them interchangeably when in fact they have very different roles. Even if the same person is both trustee and executor by appointment, it is very important to fully understand the differing responsibilities. Each associates differently with the role of a trustee and role of an executor. The following is an overview of these differences.

Ten Key Differences Between the Role of a Trustee and Executor

How do the role of a trustee and executor differ? The following are 10 common examples:

  1. A trustee is appointed in a trust, whereas an executor is appointed under a will. Unlike a trustee, whose appointment is governed and authorized by the terms of the trust, the executor is appointed by the court.
  2. Absent court intervention, a trustee typically does not have to deal with the probate court during the administration of the trust.
  3. Unlike the trustee, the executor must deal with regular court oversight. They must also closely follow the rules of the court when administering the estate.
  4. A trustee may have authority to act even during the creator of the trust’s lifetime. Depending on the terms of the trust, the trustee may have authority to act when the creator of the trust becomes disabled, incapacitated, or some other triggering event occurs. The powers of the trustee outline under the terms of the trust.
  5. Unlike the trustee, the executor does not have any authority to act until after the creator of the will has passed away. The will must also be submitted to and approved by the probate court before the executor’s authority is granted. Once the court approves the appointment, the court issues the appropriate authority. This allows the executor to carry out such acts including opening bank accounts, selling assets, and paying creditors.
  6. The relationship between the trustee and the person creating the trust compares to other contractual relationships. The terms of the contract outline in the trust. The trustee may have ongoing responsibilities many years after the death of the person who created the trust.
  7. The relationship between the executor and the person creating the will, however, is a little different. The role of the executor is essentially to liquidate the estate, wind down the affairs, and distribute the assets. After the administration of the estate is complete, the role of the executor extinguishes.
  8. An executor binds by law to pay the legitimate debts of the decedent. The rules applying to a trustee are slightly different, governed largely by the terms of the trust.
  9. Unlike the executor, a trustee is responsible for investing trust assets. If the assets are not invested in a prudent manner, he or she can be held liable to the beneficiaries of the trust.
  10. An executor’s compensation for the services they perform outlines under California law. Trustees, however, are eligible to receive reasonable compensation. This is for the work they perform while administering the trust. This compensation is determined based on numerous factors, including the terms of the trust itself, the trustee’s skill level, the nature and extent of the assets of the trust, and other extenuating circumstances that impact the difficulty of administering the trust.

If someone appoints you, the role of a trustee and executor is crucial. You must fully the duties and responsibilities that you are going to perform. This may be the first time that people have ever dealt with the administration of a trust or an estate. Before you start, we encourage you to check out our free guide, Understand What to Expect During a California Estate Administration. This guide offers an easy to understand overview of the process. This will start you on the path towards fulfilling your obligations.

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Scott Grossman

Scott Grossman

Attorney

The Grossman Law Firm, APC · 525 B Street, Suite 1500, San Diego, CA 92101 · (951) 523-8307
 

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