I wrote a blog article some time ago explaining the difference between an executor and a trustee and the duties of each position. (If you want to re-read it, you can find it here: https://www.kawaylaw.com/news/executor-and-trustee/)
For those who want to know but would prefer to stick with this article, the short explanation is this: the executor is the person named in the will to deal with the general estate, that is, everything the deceased person (decedent) owned in their own name. The executor’s job is to carry out the terms of the will, pay off any debts, and generally get everything out of the estate in a timely fashion. The trustee is the person named in the trust to deal with the trust estate – in other words, the trustee is only in charge of the assets specifically named as trust assets. The trustee’s job is to carry out the terms of the trust, which usually is to distribute the assets, but can also include holding and managing assets over time (e.g., until the kids are old enough to inherit or perpetually if the child is special needs and can’t manage the assets directly).
Now that we’ve covered what each job entails let’s move on to the real topic of this article: who should you choose for your executor and/or trustee?
Most people pick the same person for both. It makes life simpler, and then no one has to worry about what the difference is or who’s in charge of what. (And to make my life simpler, I’m going to refer to the person as executor/trustee for the rest of the article.)
There’s an ongoing debate over whether it’s better to choose a professional or a relative to be executor/trustee. On the one hand, a professional knows what they’re doing, and they can act as a neutral party that’s not weighed down by years of family drama. On the other hand, a family member knows all the players and their relationships with each other, knows which items have sentimental value, and (you hope) has an emotional attachment to you that makes them want to do right by you. I’m not going to weigh in on which is better because that’s a decision that you have to make for yourself. That being said, your executor/trustee should be trustworthy, good at managing money, and whose appointment will not cause more family drama.
Sometimes people wonder if there’s a problem with choosing a beneficiary as their executor/trustee (for example, one of their children). There is no legal issue with doing so, but it’s important to remember my guideline above. If your child can’t handle money or choosing this child will make your other children angry and resentful, then you’re better off choosing someone else.
Clients will also ask if they can name more than one person to serve together as executor/trustee. Again, there is no legal issue with doing so, but it’s important to remember that the more people you have working together, the more difficult it will be to get anything done. I would not recommend more than three executor/trustees because getting four or more people to agree on everything is almost impossible. In addition, you have to make sure that all your executor/trustees get along and are capable of working together – I’ve heard horror stories of people naming all of their kids (who all hate each other) as executor/trustee, saying, “Well now they’ll have to get along.” It’s much better to save everyone the headaches and legal fees and name a third party that the kids won’t object to.
If you have more questions about choosing an executor vs. trustee, please feel free to email me at email@example.com.