We highly advise you that you should make a Will. This is to ensure that assets are correctly managed and distributed according to the deceased’s wishes upon their death. Choosing the right people to act as executors and trustees is a key component within this, as they are the fiduciaries who will carry out instructions given in a Will.
Many think that an executor and trustee are the same, but in reality there are many key differences in their roles and responsibilities. This article will detail each of the roles and highlight the differences between them.
If you have any questions about executors and/or trustees, don’t hesitate to get in touch!
Topics to be answered in this article
What is a trustee?
A trustee is a person or a firm who takes legal ownership of and administers assets held in a trust for the benefit of beneficiaries. Trustees have a fiduciary duty to take responsibility for managing those assets (typically property or money) that have been placed in the trust.
The trustees must only use the monies (asset) held in the trust for the benefit of the beneficiaries. Any decision that the trustees make in relation to the trust, must be in the beneficiaries’ best interests.
The trust agreement will set out the scope of what the trustees are permitted to do, or not. There are also general guidelines for trustees to follow to assist them with carrying out their role.
What does a trustee do?
Trustees are required to prepare and keep a record of all documents in respect of the trust they are responsible for. This can include the preparation of deeds, tax returns, minutes of meetings and financial statements. Trustees should also, where appropriate, keep the beneficiaries updated.
What is an executor?
Executors are persons named in someone’s Will. An Executor is a person who will administer a deceased person’s estate upon their death. Therefore, choosing an Executor is a very important task.
What does an executor do?
An Executor is responsible for administering the estate of a deceased person. The role includes ensuring the death is registered, make sure all property owned by the deceased is secure, where applicable apply for the grant of probate, collect all assets and money due to the estate, pay taxes and debts owed by the estate and distribute the estate in accordance with the Will.
The Executor should ensure that all debts and taxes are paid before any monies are distributed to the beneficiaries, as an executor can be held personally liable if monies are paid out to beneficiaries under the Will before all debts and taxes are settled.
Other questions you might have about a trustee or executor…
Can an executor also be a trustee?
An executor can also be a trustee, and often, the executors named in Wills are often named as the trustees. It is important that the named executors are clear of the distinction between the roles and the duties that they have. It is always best to speak with the person(s) you wish to name as executor trustee in your Will to make sure they are in agreement to take this role on and to ensure that they understand the difference in the duties.
Can an appointed executor or trustee decline the role?
Where somebody has been appointed as an executor or trustee, it does not mean that they have to take the role on. They can decline to take the role if they are unwilling or unable to do so. If a person does decide to decline the role, it is known as ‘renounce’. One you renounce your role, either as executor or trustee, you give up the role and responsibilities that come with it entirely. If this happens and there are no other named executors or trustees, professionals, often solicitors, can step in to assist with the administration of the estate and apply to be named as the executors on the grant of probate.
What happens if the executor or trustee dies?
If a named executor in a Will dies before they need to step into their role, it will default to the other named Executor(s) in the Will.
If an executor dies after the grant of probate has been obtained, but the administration of the estate is not complete, it depends if the Will has named any other executors. If other executors are named in the Will, they would be responsible for stepping in.
If there are no other executors named in the Will then it depends on if the executor who died, has executors named in their Will, if so, it becomes their responsibility to finish the administration of the estate. The original grant or probate will need to be revoked and a new grant of probate application made for the issue of a new grant showing the new executors name of the grant.
Do I need a trustee or executor in my Will?
When a Will is made, an executor must be named. It is often the case that only one executor is named, but you would need to name at least two trustees.
How can Goughs help?
Goughs have a very experienced team of professionals across 6 offices who would welcome the opportunity to discuss any queries you may have. The services that the team covers include:
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