Many people are involved in settling an estate, including executors, trustees, guardians, beneficiaries, and more.
Executors and trustees both have responsibilities related to managing and distributing assets, but each serves a different function in the estate administration process.
This article describes the roles of trustees and executors, including their responsibilities. We’ll discuss how they’re different and provide tips on how to choose the right people for each role.
What is an executor?
An executor is a person named in a will who is responsible for managing the deceased's estate. An executor’s responsibilities include fulfilling the wishes outlined in the will, paying taxes, handling debts, and ensuring the proper distribution of estate assets to beneficiaries.
👀 What happens to your debts when you pass away? →
Executor responsibilities
Executor duties include:
- Organizing the deceased’s funeral and burial wishes
- Paying off remaining estate debts
- Collecting any debt that’s owed to the deceased
- Applying to probate court for a grant of probate, if necessary
- Distributing assets from the estate to beneficiaries
- Filing final tax returns
- Communicating with heirs and beneficiaries through the settlement process
An executor handles your estate assets after you pass away. If you’re interested in giving someone the authority to manage your assets while you’re alive, you may want to consider making power of attorney documents.
What is an estate trustee?
A trustee is the person or organization responsible for managing assets within a trust, rather than a will. A trust may be established during a person’s lifetime, like an inter vivos trust, or upon their passing, like a testamentary trust.
Trustees oversee the trust according to its terms and handle distributions as outlined within the trust document.
Trustee responsibilities
Duties of a trustee include:
- Safeguarding and handling investments or other assets in the trust
- Giving beneficiaries their distributions according to the trust's guidelines, often spread out over time
- Keeping beneficiaries informed and providing regular accounting of the trust’s activities and assets
Is an executor considered a trustee?
No, an executor and a trustee serve distinct functions. An executor manages the will and oversees the estate administration process, while a trustee administers a trust and manages its assets based on the terms established.
Can a trustee also be a beneficiary?
Yes, a trustee can also be a beneficiary of the trust or a beneficiary of the will that created the trust. This arrangement is common, particularly in family trusts.
However, like an executor, a trustee has a legal obligation to remain impartial and act in the best interests of all beneficiaries, regardless of their own personal involvement.
Can someone be an executor and estate trustee?
Yes, if someone is named both executor and trustee of an estate, they would be responsible for managing both the estate and the testamentary trust created from it.
Key differences between trustees and executors
Executors and trustees have different purposes, responsibilities, and timeframes to carry out their roles. Key differences include:
An executor is responsible for administering the will and estate assets posthumously, while a trustee manages assets held in trust, often with a longer-term, continuous commitment.
How to choose a trustee and an executor
It’s important to choose the right people for each role, as both trustees and executors hold significant responsibilities and power over your personal and real property. They also act as personal representatives for your wishes about your assets and estate.
Considerations for choosing an executor
When choosing an estate executor, look for someone who is:
- Trustworthy: You should be able to rely on them to act in the best interests of your estate and beneficiaries. You shouldn’t be worried they’ll abuse their power as executor.
- Organized: They should be able to manage estate responsibilities, from debt repayment to asset distribution, efficiently.
- Available: Executors may need to commit a lot of time and energy to fulfilling their duties. If your choice becomes unavailable, you can always change them.
Another important thing to consider is how your death may affect your chosen executor.
“You need to ensure your executor will have the wherewithal to carry out their duties,” advises Shawn Patenaude, a Wills and Estates lawyer in Saskatchewan, “and in making such a decision, consider the impact your death may have on their mindset.”
Learn more about executors and how to choose one →
Considerations for choosing a trustee
A trustee may require more financial expertise and long-term reliability compared to an executor. Qualities of a good trustee include:
- Financial knowledge: They should understand investments and managing assets, or should be able to seek expert advice if they need to.
- Long-term commitment: Since trusts may last years or even decades, choose someone who can make this commitment.
- Impartiality: A trustee should remain unbiased, especially if the trustee is a beneficiary of the trust or has personal connections with others involved in the trust.
Learn more about trustees in a will →
Choose people to manage your estate and assets today
Without a will, you can’t decide who becomes your executor or estate trustee or what happens to your assets after you pass. That’s why it’s important to make a will and document your wishes today.
By choosing people you trust, you can be confident that your final wishes will be carried out and your loved ones will be looked after.
