WHAT IS A TRUSTEE?
A trustee is legally designated to administer and manage a trust.
A TRUSTEE IS APPOINTED BY A GRANTOR
- A trustee is appointed by the person(s) creating the trust, called the grantor(s).
- Co-trustees may also be appointed, so there may be multiple persons, with equal legal responsibility, managing a trust.
- A trustee works on behalf of the trust’s beneficiaries, while ensuring the trust’s terms are honored.
A TRUSTEE IS A FIDUCIARY
- As the custodian of a trust, a trustee has the fiduciary responsibility to manage the trust’s assets. As the guardian of a trust, a trustee’s financial responsibility is significant.
- A trustee has the authority to make investment and divestment decisions and may also have the role of disbursing funds per the terms of the trust.
- As a fiduciary, a trustee also keeps records and may file taxes.
A TRUSTEE MAY BE RESPONSIBLE FOR OTHERS’ WELL-BEING
- A trustee may oversee the trust’s assets for the benefit of those whose age or mental capacity or other individual circumstance precludes them from carrying out a trustee role.
- A trustee may be involved in healthcare decisions, as directed by the trust
TRUSTEE VS EXECUTOR
Some may use the term trustee and executor interchangeably, but there is a distinction between the two.
- An executor is named in a will and not in a trust.
- A trustee is not designated in a will, only in a trust.
- An executor’s main responsibility is carrying out a will’s terms–which typically results in liquidating and disbursing estate’s assets–and will do this with the supervision of a probate court.
- In carrying out their duties a trustee and an executor may eventually perform similar tasks but their guidance comes from different legal instruments.
- A will guides what an executor does.
- A trust guides what a trustee does.
DO I NEED A TRUSTEE AND AN EXECUTOR?
The answer to this question needs to be determined after you review your situation with a legal professional.
- A trustee and an executor can be the same person; this is fairly common practice and can be an advantage if it makes sense for your situation.
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