What’s the Difference between an Executor and a Trustee in Probate?
14 August 2019
When someone dies their Will is likely to appoint various people in different roles, such as Executors, Trustees and Beneficiaries. It can be confusing establishing exactly who is responsible for what during Probate.
Beneficiaries do not generally need to take an active role in Probate, whereas Executors and Trustees will have a part to play, but these two roles are very different. This article explains the responsibilities of Executors and Trustees during Probate.
What Does an Executor Do?
If the deceased has left a Will, they will normally name one or more people to act as the Executor of their Estate. This is the person responsible for administering the Estate and carrying out the terms of the Will. There is a lot of work involved in this role and it carries a significant amount of responsibility.
The Executor's duties can vary depending on the individual circumstances of the Estate. However, there are a number of key duties that will apply to most, if not all Estates.
These are as follows:
- Registering the death
- Arranging the funeral
- Securing the deceased's property (if it's empty)
- Notifying organisations of the death (including HM Revenue & Customs, the Department for Work & Pensions, the deceased's bank, their insurance company and their mortgage provider, amongst others)
- Identifying and contacting all beneficiaries of the Estate, including locating missing beneficiaries
- Calculating the value of the Estate (this will be the combined value of all their assets less their debts)
- Calculating Inheritance Tax and paying this to HM Revenue & Customs
- Applying to the Probate Registry for the Grant of Probate
- Placing a Statutory Advertisement to notify potential creditors of the death
- Collecting in and/or transferring the Estate Assets
- Settling any outstanding debts and expenses
- Preparing the Estate Accounts
- Distributing the remaining Estate to the Beneficiaries, in line with the terms of the Will
So, as you can see, there's a lot involved in the role of Executor. The legal, tax and administrative work that's required in the administration of an Estate can take up to 9-12 months to complete, with more complex Estates taking longer.
What's more, the Executor can be held personally liable for any mistakes that they make during Probate, even if these were genuine errors. For this reason, many Executors choose to instruct a Probate Specialist, who can carry out this work on their behalf.
With our Probate Complete Service we take full responsibility for getting Grant of Probate and dealing with the Legal, Tax (excluding VAT), Property and Estate Administration affairs.
What Does a Trustee Do?
The role of a Trustee is very different to the role of the Executor, and Trustees will only be needed if a Trust arises under the Will. The Trustees are the people responsible for looking after the assets in the Trust for the benefit of the named beneficiaries.
A Trust is essentially a legal structure that can be included within a Will to protect certain assets, and/or the Beneficiaries of those assets.
There are different types of Trust that can be included in a Will, and they each work in a slightly different way. The role of the Trustee will depend on what kind of Trust has been included in the Will and what the terms are surrounding it.
These are the most common types of Trusts in Wills:
- Trust for a Minor – if the Will makes provision for someone under the age of 18, the Trustees will look after their inheritance for them
- Discretionary Trust – this gives the named Trustees discretion to decide how, when and to whom (among certain beneficiaries) the assets contained within the Trust are distributed
- Life Interest Trust – This can give someone the right to income, use or occupation of the Trust assets, which will remain within the Estate of the deceased and ultimately be distributed in line with the terms of their Will
- Property Trust – this is a Life Interest Trust in respect of the deceased's share in a property only
The Trustees named in the Will have a duty to act fairly towards the Beneficiaries of that Trust, and to act in accordance with the terms of the Trust. They also have a duty to act impartially and exercise reasonable care and skill.
The main duties of a Trustee include:
- Finding out what assets are part of the Trust owns and keeping them safe
- Recovering any money owed to the Trust
- Reviewing any investments made from the Trust's assets at least once a year, and seeking financial advice if required
- Keeping records of how the Trust is being managed (the Trust Beneficiaries will have a right to see these records)
- Storing all relevant documents and paperwork in relation to Trust in a safe place (including accounts, title deeds, share certificates, etc)
As with Executors, Trustees can be held personally liable if they act inappropriately in their role. For this reason, it's always a good idea to seek professional advice and support as required.
Can the Same Person Be Named as an Executor and a Trustee?
Yes, it is possible for the same person to be appointed as both Executor and Trustee. In fact, this is not uncommon.
There is no legal reason why the same person cannot be appointed in two or more of these roles, but it's important that they are clear on the specific duties and responsibilities of each. Furthermore, a Beneficiary can also be appointed into either of these roles.