Estate planning is often much simpler than people realize, but it may still confront you with all kinds of new words and phrases. Although you could spend hours exploring the full list of estate planning terminology, two of the most important words are “executor” and “trustee.” If you have encountered these terms before, you might be aware that they represent specific roles in the estate planning process. So, what exactly is the difference between an executor and a trustee?
Executor vs. Trustee in New Jersey
Both executors and trustees are specially designated people who oversee your estate plan after you pass. While an executor oversees your entire estate, however, a trustee focuses entirely on your trust. The executor closely follows the instructions left behind in your Will, making sure that all of your last wishes are respected. This often involves the transfer of funds to beneficiaries – but executors may also handle more complex tasks. These include paying debts, assessing the value of your assets, and tasks that may not involve money at all. For example, an executor might follow instructions that involve your funeral plans.
A trustee only deals with the assets left behind in your trust. While you might leave trustees with instructions on how to distribute funds or handle assets, they can also operate with a degree of freedom and discretion. For example, a trustee might be tasked with simply “making good investments” with the assets left behind in the trust. They may then carefully manage the money in whatever way they see fit on behalf of the beneficiaries.
Similarities Between Executors and Trustees
Both executors and trustees manage assets within your estate. Both may make important decisions regarding money, and both should act in the best interests of the beneficiaries. In most cases, both executors and trustees are chosen by the estate planner.
Differences Between Executors and Trustees
Generally speaking, less financial knowledge is required for executors. These individuals merely need to follow instructions left behind in the Will, and they should not have to carry out any complicated financial transactions. In contrast, trustees are generally selected on the basis of their financial or legal knowledge. As the name suggests, these individuals are “trusted” to make sound financial decisions and manage trust assets effectively.
While trustees are always selected by the trustor (the person establishing the trust), an executor may be appointed by probate courts in New Jersey. However, this should never happen if you create a proper Will and choose an executor ahead of time. Courts only appoint executors if you fail to designate one yourself.
Find an Estate Planning Attorney in New Jersey
If you have been searching for an experienced estate planning attorney in New Jersey, look no further than Giro, LLP, Attorneys at Law. Over the years, we have helped numerous estate planners in the Garden State – and we know that approaching this process for the first time can feel a little daunting. Rest assured that we can explain various estate planning concepts in more detail during a consultation. Reach out today to get started with an estate plan that meets your family’s unique needs.