Successor Trustee vs. Executor: What’s the Difference?
Anyone with a limited knowledge of estate planning might not be aware of what it means to be a a successor trustee vs. executor of a will. Don’t worry if you’re having trouble differentiating the two because the team at Lincoln & Wenk, PLLC, Arizona’s experienced trust attorney, is here to explain everything. This in-depth guide covers the documents that name a successor trustee and executor, as well as the main responsibilities of each role.
Take a closer look at everything you need to know about this topic below.
Understanding Estate Planning Documents and Roles
Before we dive into the main differences between a successor trustee and executor, it’s important to know the legal documents that name each of these individuals. The creator of a trust will name a successor trustee who will take over trust management should they become incapacitated or upon their death. They will also take care of asset distribution according to the terms set by the original creator or grantor.
An executor, on the other hand, will be responsible for handling a person’s will after their death. They have the legal authority to settle the deceased’s estate in probate court as well as distribute assets to beneficiaries.
While these two roles sound similar and carry some of the same responsibilities, the estate planning documents at stake signify major differences. A will only goes into effect when the creator dies, whereas a living trust makes it possible for them to manage their assets and adjust their final wishes throughout their life. In addition, wills go public after someone’s death and must go through probate while opening a trust keeps your assets out of probate and remain private for everyone except your successor trustee.
Successor Trustee vs. Executor: Key Similarities and Differences
Ask an estate planning attorney what it means to be a successor trustee vs. executor and they’ll tell you that these roles have quite a few similarities along with glaring differences. Check out the major duties, benefits, and drawbacks of each individual below.
Both Are Fiduciaries
Every estate planning document needs a fiduciary or someone who will act in the ideal interest of the estate and the beneficiaries. When selecting the person you want to handle your affairs, this should be at the front of your mind. An estate’s fiduciary should put the needs of the beneficiaries and the deceased’s final wishes ahead of their own agenda.
For example, if you make someone your executor or trustee but not a beneficiary, they don’t have the legal authority to change your wishes and appoint themselves as a beneficiary. Their primary role is to carry out your final wishes depending on the terms of your will or trust.
Both Distribute Assets, Though Timelines Vary
Settling an estate after someone’s death often involves giving assets to that person’s beneficiaries listed in their will or trust. Both the executor and successor trustee will handle this task, but they might do so on different timelines. The following factors determine when beneficiaries might receive their assets:
- Court delays keeping the estate from settling
- Trust conditions dictating when beneficiaries should receive their assets
- Disputes stemming from beneficiaries over what they should receive
It’s up to the estate’s fiduciary to oversee this process and make sure that all beneficiaries receive the assets the deceased legally leaves them.
Executors Deal With Probate Court
Say you’re chosen as the executor of a loved one’s estate but have a living trust for yourself. You’ll likely find that the duties of a successor trustee vs. executor are far easier to manage due to the role of probate court. Anyone with a last will and testament will have to have an executor bring their estate through probate before everything settles.
The court will make the contents of the will public and allow anyone to contest it, such as creditors or beneficiaries. The probate process often takes several months to complete and creates additional work for your executor. They must work with an estate lawyer throughout the process and receive court approval for their actions, which can create further delays.
Trustees don’t have to go through probate since the trust and its assets remain private. This also tends to cost less in legal fees and estate taxes.
Trustees May Handle Different Assets
You can be detailed in your will and name assets such as valuable jewelry or other prized possessions. Your executor will be responsible for managing all of these assets, whereas a trustee only oversees the items within the trust, such as:
- Investment accounts.
- Real estate.
- Bank accounts.
The amount of assets the fiduciary manages depends on what the deceased names in their will or trust.
Trustees Have More Authority Before Death
When people ask attorneys about the legal authority of a successor trustee vs. executor of a will, they might be surprised to learn that one has more flexibility in their power. Opening a living trust means you’ll have full control over your estate planning and can make changes as you see fit. You can name a trustee to manage the assets alongside you or if you become incapacitated and unable to follow through.
This person will become your successor trustee upon your death and have the same power as before. If you tell a loved one they will be the executor of your will, they don’t have any formal authority over your assets until you die. Wills go into effect upon someone’s death, whereas living trusts handle someone’s estate while they’re still alive.
Executors Have More Administrative Responsibilities
Since trusts remain private while wills go public after death, the administrative duties of a successor trustee vs. executor vary greatly. Executors generally have to handle far more tasks, including but not limited to:
- Notifying both loved ones and creditors about someone’s death
- Hiring an estate lawyer to begin the probate process
- Taking an inventory of the estate’s assets and estimating a total estate value
- Paying off the deceased’s existing debts to creditors
- Settling the estate in court and then distributing all assets
Being an executor of a will is not a job anyone should take lightly. If you’re in the early stages of estate planning and decide to draw a will rather than open a living trust, the executor you name should be aware of all the responsibilities they will bear after your death.
Trustees Must Make Management Decisions on Behalf of the Deceased
A living trust will likely contain large assets like investment accounts and real estate. If the grantor can no longer manage the trust due to illness or death, it’s up to their trustee to take on the responsibility. Being a successor trustee means you’ll have to make decisions surrounding investments and property management to help grow or maintain the trust.
Like an executor of a will, you’ll also have to pay off any debts the deceased owes and pay bills related to the trust. This must happen before you can distribute assets to the correct beneficiaries.
How To Choose an Executor and Successor Trustee
Creating a trust or will takes time and planning. Naming your beneficiaries might be simple, but deciding on a successor trustee or executor may not be. If you’re debating who should be your successor trustee vs. executor during the estate planning process, keep the following tips in mind:
- Trustworthiness is key: Remember that this person is responsible for carrying out your final wishes. Make sure it’s someone you trust to handle all of the duties that come with the role.
- It’s okay to separate fiduciaries from beneficiaries: Deciding who to leave your assets to might be easy, but you don’t always have to put your beneficiary in charge of your estate. If someone else is better suited for the role of trustee or executor, you can select them, regardless of whether you also list them as a beneficiary.
- You may choose an attorney: No one understands what it means to be a successor trustee vs. executor better than an estate attorney. To make things easier for your loved ones, you can select an attorney to serve as your executor or trustee and know that they will act on your behalf.
- Discuss the role with loved ones: If you decide to go with a friend or relative over an attorney, make sure you tell them so they’re aware of the duties ahead of them. You should also have a backup chosen in case your first choice refuses to accept the role.
Following these tips puts you in a good position to move ahead with your estate planning.
Begin Estate Planning With Lincoln & Wenk, PLLC
How can you decide who should be your successor trustee vs. executor? Is creating a trust without a lawyer possible? What does the probate and estate settlement process entail?
The legal team at Lincoln & Wenk, PLLC, can answer these questions and more. Navigate the estate planning process with ease thanks to our years of experience in this field. To begin drawing up your will or trust, contact our firm at (623) 294-2464 to schedule a consultation.