Clients often give little thought to fiduciary selections when finalizing their estate plans, yet these decisions are frequently critical to ensure the client’s intent is carried out. To make an informed decision, a client must understand the differing roles of executors and trustees, as well as their powers and duties.
An executor collects an estate’s assets, pays applicable taxes and other lawful debts, and then distributes any remaining assets to the will’s beneficiaries. Once these tasks are accomplished, the executor closes the estate and is discharged of further responsibility. In contrast, a trustee usually manages assets for beneficiaries—who may be charities, minors or persons with physical, mental or emotional impairments—on a long-term basis. A trustee may distribute trust income or principal to beneficiaries using discretionary standards established by a will or trust. Such standards ensure that distributions are consistent with the testator or grantor’s wishes, and also may serve to prevent beneficiaries from squandering funds.
Fiduciary Powers
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