What Is The Difference Between An Executor & Trustee?

It is common for people to confuse Trustees and Executors. Both of these roles are important when estate planning; however, these roles are very different.

Knowing the difference between  Executor and Trustee will help you when thinking about doing your estate planning.

What Is An Executor And Trustee?

Everyone knows that a Will is a document where a person explains how their estate would be handled once they pass away. The Executor of a Will is the one who carries out the instructions within the Will. So you can assume that the Trustee of a Trust is the person who will carry out the instructions within a Trust. 

Having a better understanding of the differences between Trustees and Executors requires an understanding between Trusts and Wills. 

What Is A Will And Trust?

It is understood by most what a Will is, so we know that the knowledge gap comes from not knowing what a Trust is. A Trust is best understood by describing the different roles within a Trust. There are three roles in a Trust; the Trustee, a beneficiary, and a grantor. The Trustee is the person who will carry out the instructions set by the settlor which is outlined in the Trust. The beneficiary is the person who benefits from the Trust that is established. The grantor, is the person who is establishing the Trust.

A Trust is a contract of sorts that involves the person who is establishing the Trust (the settlor), the person who is benefitting from the Trust (the beneficiary), and the person who carries out the terms of the Trust (the Trustee). When you are estate planning, you can fill all of these roles. You can be the beneficiary, settlor, and Trustee of your Trust at the time of creating it. You will just identify who will take over the role of Trustee when you cannot do so and who will be the beneficiaries once you pass away. This is called a “revocable Trust” or a “living Trust”.

A Trust can come in different forms; however the most basic form of a Trust that is used for estate planning is the testamentary Trust and a living Trust. A testamentary Trust is established once you pass away and created in a Will. A living Trust is established while you are alive. Trusts and Wills can be used together and it is very common for this to happen. They are used together in two fundamental ways:

• A living Trust with a “pourover” Will. A living Trust is common for estate planning for the primary means of handling the estate in place of the Will, and a “pourover” Will is used to direct the assets into the Trust after your passing.
• A Will that creates a testamentary Trust. This is a will that creates a testamentary Trust that is providing for the distribution of assets into those Trusts after the estate affairs are finished.

Estate affairs that are subject to a Will are handled in Probate Court. The probate proceeding is the process of informing others who are named in the Will and creditors, as well as heirs, paying all of the final expenses and taxes of the decedent ( the person that has passed away), provide a platform for any claims to be heard, collecting all the property into the probate estate, selling of property of necessary, and distributing the assets that may be left over to those named in the Will. The Executor handles this probate process from the beginning until the end according to the Wills instructions.

When a Will directs the assets into the testamentary Trusts, the Executor transfers these assets to the Trustee once the probate process is finished. The Trustee takes over handling the assets for the beneficiaries benefit as followed by the Trusts instructions. Any property that is within the Trust is handled by the Trustee. If a living Trust is created for the purpose of estate planning, then the Trust is intended to be the primary governing document for the estate instead of the Will. The “pourover” Will is done to simply direct any assets that weren’t placed in the Trust while alive to be placed in the Trust after death. The Executor is to get these assets into the Trust. The Trustee handles these assets in the Trust and follows the Trusts terms.

A living Trust is not active once the person passes away. Once a living Trust is established, most of the assets should be transferred to the Trust during their life. Therefore a living Trust is another form of owning assets. You are the settlor,​​ Trustee, and beneficiary once you create a living Trust for your estate plan.  Once created, the person who set up the Trust will continue to own the property and handle the property just as they would if they did not own it in the Trust. If you become incapacitated or pass away, the Trust will continue and the successor trustee will takeover to carry out the instructions of the Trust. During the life of the settlor, the Trust is handled for the benefit of the settlor; once the settlor passes then the Trust is carried out for the next beneficiary's benefit named in the Trust. 

Trusts are subject to the Trust and Trustees Act in Illinois; and Wills are subject to the Probate Act in Illinois. There can be many complexities, but the main differences between a trustee and executor is who will carry out the terms of a Trust and who will carry out the terms of a Will.

Interested in Working With Us?

If you need any help regarding your estate or other legal matters please reach out to us directly here and schedule a call with one of our paralegals on our scheduling page here.