One of the most difficult parts of the estate planning process is deciding who to name as certain designees under a Will or Trust. We often will receive requests from clients for guidance regarding which type of individual or individuals that should be named as designees as executor under a will and trustee under a trust. We are also commonly asked what the difference is between an executor and a trustee.
We always like to start with the explanation that the executor is the individual that administers the probate process of a will. Typically, the administration of an estate through the probate proceedings is a much shorter time period than that of acting as trustee over a trust. A trustee administers a trust and ensures compliance with the terms of the trust. Depending upon the terms of the trust agreement, the trustee’s duties may last a lifetime. Typically, both the executor and the trustee may be removed in certain circumstances such as incompetency or unwillingness to serve. You may name the same individual as your executor and trustee or you may name different people.
While both positions require hard work and discipline, it is an honor to serve as either for a deceased loved one.
Such individuals do not need to be financial or legal experts. Many executors or trustees hire and consult with professionals such as CPAs, Attorneys, Financial Planners, and Bankers throughout the probate process or the trust administration process. Your executor and trustee should be trustworthy as you will want to be confident that your wishes will be carried out after your passing. There are, of course, many laws in place to protect beneficiaries from fraud and abuse of executors and trustees. You will also want your Trustee to be fair-minded and avoid any favoritism among the beneficiaries. Your Trustee should be strong willed as they may have to say no often to a beneficiary if the Trustee believes such requests would conflict with your wishes expressed in the trust.