A trustee and an executor have special responsibilities to respect your wishes within the end-of-life legal documents you write.
Both a trustee and an executor are considered assigned fiduciaries. Fiduciaries are people who are obliged to act on your behalf and in your interest for end-of-life instructions.
Probate is the process where the court supports the instructions within the legal document and designates the executor.
An executor is assigned as the administrator of a will, estate plan or life insurance policy. Each document explicitly assigns the executor and the estate is brought through the probate process. By law, there must be an executor named within the legal document or the court will appoint one. The executor is responsible for protecting the estate, taking inventory of assets, paying taxes associated with claims, filing income tax return, and distributing property amongst beneficiaries. The executor may hire a professional, paid by the estate assets, to assist in carrying out the functions. The process can take more than three years of hands on commitment, but typically the first 3 months are the most time-consuming.
A trust is typically created in order to avoid probate and keep the property outside of court control.
The trustee is responsible for distribution of property to the beneficiaries within the trust. Management of property for the trustee can go on for years and years, depending on the size of the estate. Just as the executor should have significant experience with finance and business, a trustee requires knowledge in investment, bill payment, accounting and asset management. A bank is highly recommended to serve as the successor trustee, or secondary trustee. A person can appoint multiple trustees to co-manage different facets of your assets or property. By law, the powers appointed to the trustee must be spelled out in the trust.