EXECUTOR TRUSTEE GUIDANCE
Chicago Probate Administration and Executor Trustee Guidance Litigation Lawyers
Executor Trustee Guidance – Contact our law office today if you’re an executor or trustee of an estate. Our lawyers will help you navigate through the often complex process of probate in Illinois.
We serve clients throughout Chicagoland. Just some of the communities we serve include:
Elgin, St. Charles, Rolling Meadows, Geneva, South Elgin, Barrington, Carpentersville, Lake In the Hills, Geneva and Crystal Lake.
Executor or Trustee – A Brief Look at the Differences Between These Important Roles
This a question that often arises when client plans to place a trust within their will. Typically this is called a testamentary trust. It is ineffective until the individual who creates the will with trust passes away. Until that occurs, a testamentary trust is subject to revocation and it cannot contain assets. One may compare this form of trust to a living trust. A living trust is one that doesn’t exist in a final will. A living trust may be effective while the person is living and assets can title into it as well.
A trust is a form of contract. It’s between the individual who forms the trust and the person who is the trustee. The role of the trustee remains the same for a testamentary or a living trust. If a beneficiary is a minor or disabled, a lawyer might recommend drafting a testamentary trust into a will. Likewise if a beneficiary has a history of financial irresponsibility.
An executor is comparable to the role of a liquidator. Think of it as winding down the business a person conducts during their lifespan. An executor submits a person’s will to probate before the relevant county surrogate. The executor collects the deceased’s assets and may put them into an estate account.
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Then, the executor pays the deceased person’s debts. Part of which may include any death taxes the person owes upon their passing. An executor accounts to an estate’s beneficiaries and distributes the assets them according to the will.
Because an executor is also a fiduciary, he or she has a duty of care when administering the estate. It generally takes a few months up to two years to completely administer an estate.
A trustee is also a fiduciary. Consequently, a trustee has the highest duty of care when administering the assets of a trust to its beneficiaries. As a fiduciary, a trustee may be liable to a trust’s beneficiaries if he or she invests the assets irresponsibly.
A trustee also distributes trust assets to beneficiaries according to the trust’s terms. For example, a trust might indicate the trustee may distribute assets specifically for a beneficiary’s education expenses. The trustee’s role might last for a matter of months or for many years. As result, a trustee might serve in that role for quite a long time. This a contrast with the role of an executor.
Both a trustee and an executor have a duty of care to a trust’s beneficiaries. However, their roles with respect to beneficiaries are different. While an executor liquidates assets a trustee serves more like a business manager.
In summary, some of the main responsibilities of executors and trustees are:
Executors represent an estate for legal reasons. As an example, an executor hires an estate lawyer, petitions the court and attends court procedures. In addition, they manage an estate’s affairs and costs. This includes paying off debts as well as collecting receivables. Executors plan for cash and liquidity requirements and arrange asset appraisals too.
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An executor contacts government institutions as appropriate to get information the estate may require. Also, they may distribute notifications to beneficiaries to update them regarding their interests in the estate.
Trustees also have a number of responsibilities too. For instance, they confirm key aspects when taking on their role. They verify the estate’s assets are secure and under their control. They must understand terms of a trust and the identities of the beneficiaries. Additionally, a trustee confirms that past account records are in good order.
When applicable, a trustee invests the assets of a trust. They must do so in such a manner as to preserve the assets for the beneficiaries. Trustees administer a trust in compliance with its terms. Specifically with respect to distributing assets to beneficiaries.