Life, as we all know, is unpredictable in that death can come knocking anytime, and there is nothing you or anyone can do about it. This unpredictable nature of life is why you must plan your estate accordingly. The importance of planning one’s estate can never be underestimated because this estate plan will act as your legal representation after you might have passed on. The documents will show the number of properties, how you want them to be distributed, and to whom you want them to be distributed after you have passed. One thing to note is that contrary to popular belief, anybody can plan their estates as long as they have personal assets; in short, it is not only a “wealthy people” thing
When it comes to estate planning, you will be required to set up your Will and form a Trust while you are at it. These two (Will & Trust) are very distinctive and are managed differently. For example, when it comes to your Will, you will need to name an executor to help you see to it. The same thing can be said about your Trust, but instead of an executor, you will need to name a trustee to help you see to it. From the simple explanation we have just given, one thing is clear; a Trustee is not the same as executors in that they don’t perform the same function. Therefore, we will discuss the differences between the two in this article.
So, fasten your seat belt and read on!
Who is an estate executor?
Before we talk about the differences, you should familiarise yourself with what or who an estate executor is. Simply put, an executor is a living entity you named in your last will to help you distribute your assets to beneficiaries after you die. Keep in mind that an executor does not distribute the estate randomly; instead, he follows the terms set out in the last will.
Some of the roles of an estate executor include obtaining a copy of the deceased last will and then offering it for probate with the probate court. He/she is also required to obtain a grant of probate from a court of law – by doing this, the executor will be given the authority to act on behalf of the deceased. Also, he/she needs to notify all the financial institutions that the deceased uses about the death.
He will also be in charge of paying the taxes and necessary bills of the estate and opening a bank account for the estate. Lastly, he/she will manage the property, and when the time is right, he/she will distribute the assets to the beneficiaries.
Who is a trustee?
Like an executor, a trustee is also named in a deceased last trust. The primary role of a trustee is to distribute trust assets to all the beneficiaries listed in the deceased trust document. Aside from this, a trustee performs other duties, such as the management of trust assets as well as the bank account for the trust. A trustee will also pay all the necessary bills of the trust and must keep all records.
Main differences between an estate executor and a trustee
If you are new to estate planning, there is a high chance that you will likely mistake an estate executor for a trustee because they both deals with the same thing, which is to manage and distribute the assets of a deceased person. But executors and trustees are different because they operate differently. Hence, in this section, we shall draw out some important distinctions between their roles:
For an executor, the type of real estate document that gives him the power to act on behalf of a deceased is the last will. In that, the executor’s name must have been included in the last will by the asset owner before he/she dies. On the other hand, a trustee gets to act on behalf of a deceased if the person’s name has been included in the trust agreement.
Another difference between the two can be found in their roles or responsibilities. An executor’s primary role is to manage and distribute the deceased estate assets to beneficiaries in accordance with the deceased last Will. On the other hand, a trustee manages and distributes trust assets to beneficiaries as specified in the trust agreement.
Also, they will be dealt with differently when they fail to perform their responsibilities. For instance, as an executor, if you do not perform your responsibility, the estate’s assets will be taken away from you and distributed by the court. For a trustee, on the other hand, if the person doesn’t perform his or her role, the trust will be revoked, and all the Trust assets will be distributed.
Conclusion
In legal terms, both executors and Trustees are referred to as fiduciaries because they are legally obliged to act in the best interest of beneficiaries. Therefore, before you select anyone to be your estate executor or trustee, you have to make sure that you can trust them and that they can also perform all their responsibilities without any problem.
If you have questions about estate planning or need assistance creating a plan that meets your needs, contact Saanichton Law Group today. Our experienced attorneys can answer your questions and help you create a comprehensive estate plan that protects your assets and provides for your loved ones.
