Differences That Are Unique to Both Trustee and Executor
A trustee and an executor have a lot of similarities in terms of their job. However, there are some distinctive differences between a trustee and an executor. An executor may distribute assets under the probate court’s supervision. A trustee, on the other hand, may manage an estate for many years after the deceased’s death, sometimes even for life.
Both trustee and executor may see to it that the deceased’s assets and monies be distributed accordingly after the person’s death. However, are you aware that there are differences between the two?
Trustee and Executor Definitions
Before we discuss the difference between a trustee and an executor, here are the definitions of both.
Trustee; according to Investopedia, a trustee is:
A person or firm that holds and administers properly or assets for the benefit of a 3rd party. A trustee may be chosen for a huge variety of reasons such as for bankruptcy, charity, trust fund, or certain kinds of retirement plans and pensions
Executor, according to Investopedia, means:
A person appointed for an estate to administer the last will and testament of a deceased person. His/her main duty is to carry out the instructions to manage the affairs and wishes of the person who has passed away. An executor is normally appointed by the country’s law courts. However, there will be occasions where the executor will be chosen by the testator.
How Are Trustees and Executors Different From Each Other?
Now that we are done with the basic definitions of both trustee and executor, we will now talk about the differences. In this article, we will try to lay out as much differences as we possibly can.
|A trustee is someone who runs the trust your will creates. They also see to it that your properties get distributed according to what your will says.
Usually a trustee is appointed by someone who is close to the deceased when he/she is still alive. It can be a family member or a relative. Sometimes it can be a close family friend or someone who they know very well.
|An executor is someone who organizes your affairs after you have passed away.
If you have any unnamed and unlisted bank accounts, properties, assets, etc., then it’s the executor’s job to locate them and see to it that they get distributed.
Executors are often appointed by the country’s law courts. You cannot say no to an executor’s appointment. However, there will be cases where you can choose not to have an executor but to have an administrator instead. The mechanics of how this work has its own rules and exceptions.
|A trustee is for lifetime appointment. It means that as soon as you have appointed a trustee, the trustee will advise and guide you accordingly in how to distribute your assets, monies, and properties. Trustees are not your personal assistants or lawyers although they may seem like it.
After you have passed away, your appointed trustee will continue to advise and see to it that your assets, monies, and properties get distributed. Not only do they see it distributed, they also see that your beneficiaries manage your assets “properly” (if we can say it that way).
In some ways you can say that a trustee is “for life” in this case.
|An executor is appointed for temporary occasions. As soon as you have passed away, an executor will be appointed to handle the distribution of your belongings according to your will (if there is one).
As soon as they are done with locating the will and ensuring that it’s been followed accordingly, their job as your executor is pretty much done. They do not really advise your beneficiaries in how to handle the assets they’ve received from you as it’s not an executor’s job to do so. They only see to it that your will has been fulfilled and that your assets be distributed accordingly.
|A trustee does not have to handle Grant of Probate and everything surrounding it. Their job as a trustee is to help manage the distribution of the assets, monies and properties. They are not legal people who handles the legal side of things.||An executor handles the legal side of things as they are (by logic) appointed by the law courts. So that means they will handle Grant of Probate and other legal proceedings surrounding the deceased’s assets.
Having said that, it is normal to see executors looking into any outstanding debts and debtors, looking for any unnamed properties, and so forth.
|Trustees do not have power over bank accounts, properties, and other assets that are not named and listed in the deceased’s will. They can only oversee and manage whatever has been listed in the latest legal will.||Executors have power and “authority” over any assets, bank accounts, and properties that are not listed in the deceased’s will. Whatever asset that has surfaced or unearthed by the executor and law courts, the executor will see to it that it be distributed to the next-of-kin according to the Malaysian Distribution Act.
However, if there are any outstanding debts that needs to be cleared, then the assets will be used to pay off these debts.
In conclusion, there are some distinctive differences between a trustee and an executor. Most of their tasks and jobs may be similar, but there are some stark differences. We hope that you are able to learn some of the differences between the 2 roles after reading this article.