The roles of an executor and a trustee play important parts in managing the affairs of a deceased person. However, while both positions involve overseeing assets and carrying out instructions, there are major differences between the two.
Smart Asset describes three major ways a trustee and an executor are distinct from each other.
Duties
An executor is responsible for overseeing the affairs of an estate. If the decedent wrote a will, the executor must carry out its terms. Executors handle a variety of tasks, including the identification and gathering of assets, paying debts, and dispersing assets to beneficiaries.
However, a trustee only manages the assets contained within a specific trust. Also, a trustee must handle whatever duties a grantor spells out in the trust documents, which may include investments of trust assets in addition to distributing money to beneficiaries. Also, in contrast to estate responsibilities, trust duties tend to be ongoing in nature.
Time of appointment
An executor begins serving after the death of the person who owned the estate. By contrast, a trustee might start service before or after the trust grantor has died. Depending on the structure of the trust, the grantor may even remove the trustee and appoint a new one.
Length of service
Executors generally serve until every task stemming from the estate is complete. Once the executor has settled the debts of the estate and distributed assets to heirs, there is often nothing more for the executor to accomplish. By contrast, trustees can act for years or even decades until the fulfillment or termination of the trust.
With these differences in mind, a person making estate plans may know how to choose either an executor or a trustee who has the qualifications to carry out the position.