Estate Trustee vs Executor

What is the difference between an Estate Trustee and an Executor?

Anna Dunaeva DLegal Anna Dunaeva August 2, 2021
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Are Executors the Same as Estate Trustees and Personal Representatives?

Estate trustees, executors and personal representatives play an essential role in the estate planning and administration process. Because these roles have significant similarities and one person can handle them all, people often use the terms estate trustee vs executor, and personal representative interchangeably. However, these terms have different meanings. As a result, one can quickly get confused and misuse them.

Simply put, an executor is someone appointed in the Will to manage the deceased’s estate. On the other hand, an estate trustee runs the trusts created by the deceased in the Will. As for a personal representative, in its narrow meaning, it is the same as executor under the new Alberta Wills and Succession Act and the Estate Administration Act.

What Do Executors Do?

In summary, the executor’s role is to carry out the administration of the deceased’s entire estate, except for testamentary trusts created by the deceased, if any. In doing so, the executor deals with the deceased’s estate according to the law and fulfills the deceased’s wishes according to the Will.

Once an executor begins administering the estate, they need to locate the property and ensure its proper maintenance. Also, the executor will determine and pay the liabilities of the deceased, such as taxes, debts, bills, and support obligations. Based on this, the executor will calculate the estate’s net value by deducting the deceased’s liabilities from the assets.

Having paid all debts, the executor can distribute the estate among the beneficiaries as set out in the Will. Most of the time, the executor must apply for a Grant of Probate to receive the court’s approval for the distribution. However, if the estate is very simple, Probate may be unnecessary.

While the distribution of the estate is the most complex task, executors have other responsibilities. They arrange for funerals, pay ongoing bills and notify public officials, the deceased’s employer, and other parties of the death. If the deceased created trusts, the executor may request an accounting of assets from trustees to ensure they are managing the property appropriately.

The executor’s journey is over once they distribute all the property of the estate. For example, if the deceased did not create trusts in the Will, the executor transfers property straight to the beneficiaries. On the other hand, suppose the Will created a trust. In that case, the executor transfers the property specified by the deceased to the estate trustees.

What is an Estate Trustee?

If the deceased settled a trust in the Will, the estate trustee steps into the executor’s shoes once they receive the property designated for the trust. The primary duty of the estate trustee is to manage the trust property in the best interests of the trust beneficiaries and according to the last Will of the deceased. A trustee deals only with trusts designated to them. They are not responsible for any other estate matters.

Receiving a property in trust from the executor, an estate trustee becomes a temporary owner of such property. However, the estate trustee is bound by the deceased’s instructions regarding the management and distribution of income and capital of the trust. Also, the estate trustee must act in the best interests of the beneficiaries of the trust.

Some trusts, such as trusts for minors, are used to preserve the property until an event specified by the deceased and transfer it outright to the beneficiaries after that. For example, most parents prefer to keep the kids’ property in trust until the kids reach a certain age. At that point, the kids receive their shares, and the trust gets terminated.

Other trusts, such as trusts for disabled people, spendthrift family members, or pets, provide a long-term income stream for their beneficiaries. While the beneficiary receives regular maintenance from the trust, they may never receive the assets generating the revenue. When the beneficiary dies or loses entitlement to receive the trust income, the income flow may go to another beneficiary if the Will so directs. Alternatively, the Will may provide termination of the trust and transfer of the trust assets straight to a designated recipient.

How Do the Roles of Estate Trustees vs Executors Differ?

In a nutshell, the main difference between the executor and the estate trustee lies in the scope of their responsibilities. The executor is responsible for the entire estate of the deceased, while the trustee supervises separate trusts. The executor’s work is done after they distribute the estate to the beneficiaries directly or transfer the property to trustees according to the Will. The trustee’s work gets completed after the trust comes to an end.

Similarities Between Estate Trustees vs Executors

Quite often, executors and estate trustees are the same people. Their role simply transforms from the executor to the estate trustee over time. This practice is quite usual for typical family situations. Most of the time, people do not have that many choices for reliable individuals who would handle such time-consuming and complex tasks as estate or trust management. As a result, they tend to appoint the same person to manage their estate and the testamentary trusts they create.

Because both executors and estate trustees manage the deceased’s property for the benefit of others, they both owe a duty to act honestly and in good faith. As a result, they are accountable for the property. Therefore, they shall maintain proper records of the handling of the property entrusted to them.

Whether you are a trustee, an executor, or both, you are not alone. DLegal wills and estates lawyers are here to guide you through the estate administration process. Estate Administration is a significant part of our practice. We have helped many trustees and executors complete their complex tasks. We welcome you to send us an email or contact us by phone or through the website, so that we could make it easy on you.

Questions?

The DLegal team is here to support. We will do our best to assist or connect you with those who can help.

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