Trustee vs. Executor: What's the Difference?

Estate planning can be challenging, both emotionally and legally. It often requires people to think through difficult questions about mortality, family responsibilities and how assets should be managed after death. Trusts can help simplify parts of the process, but they also come with specific roles that are important to understand. Two common terms are trustee and executor. A trustee manages a trust and the assets it holds, while an executor carries out the instructions in a will, including paying debts and distributing property after someone dies.

For help with trusts or other estate planning decisions, consider working with a financial advisor.

What Is a Trustee?

A trustee is the person who manages the assets in a trust. This is different from the trustor, who’s the person who creates the trust. When it comes to estate planning, the trustee normally plays their most important role after the trustor passes away.

Trustees are especially important when the assets in the trust are being held for a minor who’s set to receive the assets inside the trust once they reach a specific age. For instance, let’s say someone forms a trust full of investments they want passed on to their children, who are teenagers. If that person dies before their children turn 18, the named trustee will manage the assets in the trust for those minor children.

The trustee has a legal responsibility to act in the best interest of the eventual beneficiaries of the assets in the trust. This means making the smartest investments, not taking unnecessary risks and doing anything else that will lead to the best results for them.

What Is an Executor?

An executor, on the other hand, is the person who makes sure that a recently deceased person’s wishes – as expressed in a will – are carried out. They make sure that the correct assets are passed on to the right family and friends. This can include following through on any charitable donations the decedent wanted to be made with the money they left behind and defending the will against any challenges.

The executor also has legal responsibilities, such as making sure that the estate’s probate paperwork is filed. They also must oversee the probate process in the name of the estate. This could also include making sure the estate tax is dealt with correctly.

While some states have their own estate and inheritance taxes, the premier one is the federal estate tax. For 2021, this only applies to estates worth more than $11.7 million, meaning most estates won’t end up owing anything. Executors will need to know the state laws for the place where the deceased died as well. States have different exemption amounts too.

Finally, the executor has to settle any debts the estate has. This includes credit cards, mortgages and any other loans the person still owed when they died.

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Trustee vs. Executor: Key Differences

A trustee and an executor can both manage assets after someone dies, but they do so in different legal roles. A trustee manages assets held in a trust, while an executor manages the probate estate and carries out instructions in a will. In some estate plans, the same person may serve in both roles, but the responsibilities are not identical.

Category	Trustee	Executor
Main role	Manages assets held in a trust	Administers the estate through the will and probate process
Governing document	Trust agreement	Last will and testament
When the role begins	Often during the trust creator’s lifetime or after death, depending on the trust terms	After the person dies and the executor is appointed or recognized by the probate court
Assets controlled	Assets titled in the name of the trust	Assets owned by the deceased person that must pass through probate
Core duties	Manage trust assets, follow trust terms, make distributions and act in beneficiaries’ best interests	File probate paperwork, identify estate assets, pay debts and taxes, and distribute property according to the will
Court involvement	May avoid probate if assets are properly funded into the trust	Usually involves probate court oversight
Length of role	Can last for years if the trust continues for minors, disabled beneficiaries or staged distributions	Often ends once debts are paid, assets are distributed and the estate is closed
Fiduciary duty	Owes duties to trust beneficiaries	Owes duties to the estate and its beneficiaries

Choosing Trustees and Executors

There are many estate planning choices, but picking trustees and an executor are among the most important. For both, you’ll want to pick someone you explicitly trust. A trustee should be someone who’s willing to manage the trust for as long as necessary. In addition, you should trust their ability to make decisions in the best interest of the beneficiaries.

For an executor, the right choice is someone who you know will make sure your wishes are respected. While you’ll likely be leaving a will with detailed instructions, it may even make sense to talk with your executor before you die so they are clear on your wishes. This can help ensure your needs are carried out exactly how you envision them.

Bottom Line

A trustee manages a trust and its assets on behalf of the beneficiaries, with a legal duty to act in their best interests. An executor, by contrast, carries out the instructions in a will after someone dies, which can include distributing assets, paying debts and handling other estate responsibilities. Both roles can be central to an estate plan, so it’s important to choose someone who is trustworthy, organized and capable of carrying out their duties carefully.

Estate Planning Tips

A financial advisor can help you make all the right choices when it comes to estate planning. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
Another person you’ll need to name is a guardian. This is who will take custody of any minor children you have if you and your spouse die. Though this isn’t pleasant to think about, if you take care of it now it can save everyone a big headache later.