Generally, an executor administers the estate of the person who died, while a trustee administers a trust for the benefit of the named beneficiaries.
A trust is a fiduciary1 relationship in which one party (the Grantor) gives a second party2 (the Trustee) the right to hold title to property or assets for the benefit of a third party (the Beneficiary). The trustee, in turn, explains the terms and conditions of the trust to the beneficiary.
Is a trustee the same as the owner of a trust? The trustee of a trust is not considered the legal owner of the trust's assets in the traditional sense. Instead, the trustee holds legal title to the trust property, but they do so for the benefit of the trust beneficiaries, who hold equitable title.
family member or friend serving as trustee, many donors often pair a family trustee with a professional trustee. This arrangement combines the strong personal connections of a family member or friend with the legal and administrative expertise of a professional.
Attorneys as Trustees
Attorneys in California are uniquely positioned when it comes to serving as fiduciaries. They do not require additional licensing to serve as trustees, executors, or conservators, unlike other non-relatives.
In essence, while both roles are powerful within their domains, trustees often have more enduring and autonomous control over the assets they manage.
An executor does not possess the power to overrule or change the terms established by a trust; these roles carry separate responsibilities. An executor's role consists of overseeing and closing an estate as per its will's instructions without disrupting or interfering with their independent functions as trustee.
A trustee typically has the most control in running their trust. They are granted authority by their grantor to oversee and distribute assets according to terms set out in their trust document, while beneficiaries merely reap its benefits without overseeing its operations themselves.
Anyone 16 and over (18 for an Unincorporated Association or Charitable Trust) who is not 'disqualified' can be a Trustee. The reasons for disqualification were set down by the Charities Act 2011, and were designed to prevent people convicted of financial crimes, or who made serious financial errors, becoming trustees.
The Trustee acts when the original Grantor dies or is no longer able to act on their own behalf. The original Grantor, or creator of the Trust, is the original Trustee to the Trust. The Successor Trustee begins their work once the original Grantor dies or becomes incapacitated.
As previously mentioned, trustees generally cannot withhold money from a beneficiary for no reason or indefinitely. Similarly, trustees cannot withdraw money from a trust to benefit themselves, even if the trustee is also a beneficiary.
All in the family
In most instances, clients select family member trustees for both emotional and financial reasons. Clients may believe that a family member will have an emotional attachment to the beneficiary of the trust and as trustee will stick with the job, come what may.
While executors have discretion in some areas, your core decision-making is bounded by: The deceased's will. You must follow their distribution wishes rather than diverging based on your own judgments.
A trustee is a third party who is authorized by a settlor to execute and manage trust assets . A trustee holds the title of the trust asset.
Trustees generally do not have the power to change the beneficiary of a trust. The right to add and remove beneficiaries is a power reserved for the settlor of the trust; when the grantor dies, their trust will usually become irrevocable. In other words, their trust will not be able to be modified in any way.
A trustee must abide by the trust document and the California Probate Code. They are prohibited from using trust assets for personal gain and must act in the best interest of the beneficiaries. Trust assets are meant for the benefit of the trust beneficiaries and not for the personal use of the trustee.
Typically, a revocable trust with clear provisions for outright distribution might conclude within 12 to 18 months. However, in simpler cases, the process can take an average of 4 to 5 months without complications.
The short answer is yes. Trustees can be a beneficiary of a discretionary trust, but they usually will not be able to make unilateral decisions, as there generally will be someone else acting as co-trustee who will have to sign off on any discretionary decisions being made surrounding the trust.
As noted in the previous section, an executor cannot change a will. This means the beneficiaries who are named in a will are there to stay. Put simply, they cannot be removed, no matter how difficult or belligerent they are being with the executor.
The executor of a will can take everything only if they are the sole beneficiary of a decedent's estate and all of the decedent's debts have been paid.
The probate court appoints the executor after filing the will. It is common for the executor and trustee to be the same person.
An executor has the authority from the probate court to manage the affairs of the estate. Executors can use the money in the estate in whatever way they determine best for the estate and for fulfilling the decedent's wishes.
Experience and Knowledge. Another key consideration is whether the individual or entity is qualified to act as trustee. If the trust has substantial assets, an individual with experience managing significant assets or with a background in finance or investments may be better suited to the role of trustee.
An executor can also be someone you've named as a beneficiary in your will. The role of an executor is a serious one which carries a lot of responsibility. When choosing your executor or executors you need to bear this in mind. It should be someone you trust to carry out this work.