People ask me “What’s the difference between an Executor and a Trustee?” They are similar, but different.
- They are each responsible for seeing that your wishes are carried out when you die. To ensure that your desires and instructions are carried out, choose someone who is dependable, responsible, and available to serve.
- An executor takes care of administering a Will. That includes the process of “probating” the Will.
- A trustee takes care of administering a Trust. Where a client has properly “funded” and maintained his or her trust, there is no probate, so an executor is not usually needed.
Aside from the foregoing differences, the responsibilities of the executor or trustee will vary depending on your directitons, but some of the most common duties include:
- Locating and protecting the assets, determining “who gets what” and making sure the assets are properly distributed.
- Create an organizational method to keep track of important documents such as a death certificate and application for a federal tax identification number (EIN).
- Open checking and savings accounts for the estate. These will be used to hold any money owned by the deceased.
- Find out if probate is necessary and oversee the process. Again, with a Will, probate is usually necessary, and with a Trust, probate can be avoided. Funds like IRAs and 401(k) accounts, life insurance payouts, etc. usually don’t need to go through probate — as long as the beneficiary designations are done correctly.
- Notify any creditors, banks, lenders, or property managers of the death and close any accounts.
- Pay any debts and taxes owed.
Some of these tasks may seem overwhelming to the executor, especially in the midst of dealing with the death of a loved one. Seeking out the help of an estate planning attorney can help in getting things done smoothly, promptly and correctly. The attorney who helped prepare the estate plan may be a good person to contact for help.
- 6 Important Estate Planning Considerations – Part 4: Beneficiary Designations - June 1, 2018
- Retirement: It’s not Just About the Money - May 1, 2018
- Estate-Tax “Portability” — Oasis or Mirage for Larger Estates? - March 19, 2015