23 Sep What are the differences between an Executor and a Trustee?
The roles of an executor and a trustee, while sometimes held by the same individual, have separate duties when it comes to managing a deceased person’s estate.
Role of the Executor
An executor is responsible for administering the deceased’s estate according to the terms of the will. This involves several key duties:
– Collecting Assets: The executor must identify and gather all assets of the deceased.
– Paying Debts and Taxes: The executor is responsible for settling any outstanding debts and taxes owed by the estate.
– Distributing Assets: Once debts and taxes are paid, the executor distributes the remaining assets to the beneficiaries as specified in the will.
The executor’s role is crucial during the initial phase of estate administration, ensuring that the deceased’s wishes are respected and legally executed.
Role of the Trustee
Once the estate has been settled, the trustee takes over the responsibility of managing any assets held in trust. The trustee’s duties include:
– Holding and Managing Assets: The trustee holds the legal title to the trust assets and manages them according to the terms of the trust.
– Ensuring Beneficiary Entitlements: The trustee must ensure that the beneficiaries receive their entitlements as outlined in the trust agreement.
The trustee’s role is ongoing and involves managing the trust assets for the benefit of the beneficiaries, which may include making investment decisions and distributing income or principal as required.
Importance of the Distinction
Understanding the distinction between an executor and a trustee is important due to potential legal implications. Different legislation may apply depending on whether an executor or trustee is acting. Additionally, the rights of beneficiaries can vary based on whether assets are held by an executor or a trustee. For instance, beneficiaries typically do not have a beneficial interest in the estate until the executor has completed the administration and the assets are transferred to the trust.
In summary, while the roles of executor and trustee may overlap, they serve different functions in the management of a deceased person’s estate, with the executor focusing on settling the estate and the trustee managing ongoing trust responsibilities.
Are you thinking about rewriting your Will and assigning your Executor and Trustee? To discuss this with one of our Wills and Estates Team you can contact us on 8525 2700 or click here to request an appointment with one of our experienced Team.
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