A trustee and an executor have a lot of similarities in terms of their job. However, there are some distinctive differences between a trustee and an executor. An executor may distribute assets under the probate court’s supervision. A trustee, on the other hand, may manage an estate for many years after the deceased’s death, sometimes even for life. 

Both trustee and executor may see to it that the deceased’s assets and monies be distributed accordingly after the person’s death. However, are you aware that there are differences between the two? 

Trustee and Executor Definitions 

Before we discuss the difference between a trustee and an executor, here are the definitions of both. 

Trustee; according to Investopedia, a trustee is: 

A person or firm that holds and administers properly or assets for the benefit of a 3rd party. A trustee may be chosen for a huge variety of reasons such as for bankruptcy, charity, trust fund, or certain kinds of retirement plans and pensions 

Executor, according to Investopedia, means: 

A person appointed for an estate to administer the last will and testament of a deceased person. His/her main duty is to carry out the instructions to manage the affairs and wishes of the person who has passed away. An executor is normally appointed by the country’s law courts. However, there will be occasions where the executor will be chosen by the testator.

How Are Trustees and Executors Different From Each Other? 

Now that we are done with the basic definitions of both trustee and executor, we will now talk about the differences. In this article, we will try to lay out as much differences as we possibly can. 

Conclusion 

In conclusion, there are some distinctive differences between a trustee and an executor. Most of their tasks and jobs may be similar, but there are some stark differences. We hope that you are able to learn some of the differences between the 2 roles after reading this article. 

An executor is someone who is appointed by the law courts to see through the distribution of a dead person’s will (if there is one). Even though if the deceased has no will, an executor will still be appointed on his or her behalf. The executor’s role is pretty universal across most, if not all cases. 

An executor is not to be confused with a trustee. Although both roles are similar and quite close, there are a few stark differences to both. 

Generally a trustee is appointed by the deceased when he or she is still alive. Everyone will need to agree to the trustee’s appointment legally. When the person passes away, the trustee will see to it that the assets and monies will be distributed according to what the will says. 

An executor’s role is similar to that of a trustee’s. However, there are a few things that an executor can do that a trustee cannot do. 

Executor’s Duties in Probate and/or Will 

Here are some jobs an executor has a distinctive role in playing. When you have passed away, these are what an appointed executor do: 

1. Find out where the will is 

The first thing the executor has to do is to locate the latest will of the deceased first. They will have to do this first before applying for the Grant of Probate with the original copy of the will. 

As soon as the latest original copy of the will has been located, the executor will then discuss the details of the will and aspects of the estate administration. Only then will the executor make sure that the probate process goes in a smooth process. 

2. Getting a lawyer to help with applying for a Grant of Probate 

After locating the will, the executor will work with a lawyer to apply for a Grant of Probate from the High Court. This can take anywhere from 3 to 6 months, which depends on how fast the court works with getting the application done. 

However, sometimes the Grant of Probate may take longer than 6 months to settle. Think about how sometimes the estate and money can be disputed by family members and people named in the will. There may be other issues surrounding it such as an unnamed property or bank account that are not listed in the will. With all that being said, the Grant of Probate may take some time to settle before any of the money and assets gets distributed accordingly. 

3. Settling any outstanding debts 

As soon as you have determined and be sure of what the deceased’s estates are, you will then have to notify the banks next. Let the banks know that the account owner has passed away (show proof where needed). The executor may need to set up a separate account for the purpose of administering the estate. 

After that, find out if the deceased owes any outstanding debts. It may be unpaid taxes or loans. There may be some people where the deceased may owe money to while they are still alive. Anyone who was owed money by the deceased will be given a period of time to submit their claims (with proof). If nobody comes forward after a while, then consider the case closed. The money and assets will be distributed accordingly to what the will says. 

Again, this can take quite a long time to settle. As sometimes there may be a lot of money to pay off. It’s not something that takes less than 2 years to settle. 

4. Determine and locate the named beneficiaries 

While you are settling all the debts and listing down the bank accounts and assets, you will also have to determine and identify the named beneficiaries in the will. Then start seeing how the assets and money are being distributed to each named beneficiary. 

If there are no named beneficiaries, then the executor will see to it that the assets and monies will be distributed according to the Malaysian Distribution Act. 

What Happens If No Executor is Appointed? 

If no executor is appointed, then the family of the deceased will have to agree who will be the Administrator(s). An Administrator will oversee the management and distribution of the assets and monies to the beneficiaries. Typically, the spouse of the deceased is the Administrator if the surviving children are not of legal age yet (18years in Malaysia). 

If the deceased’s spouse is an elderly person (or of unsound mind individual), then the deceased’s children will take up the role. However, the child has to be of legal age (18 years old) and of sound mind. 

As soon as an Administrator has been chosen, the other family members will sign a Renunciation. It means the other family members will renounce their right to apply in court as an administrator. They will sign a legal document known as “Renunciation”. 

As soon as everything has been settled, only then will the assets and monies be distributed as what the will has laid out for. If the assets and monies are not finalized, if the debtors have not completely been paid off, then the length of time for the money and assets to be distributed will take a long time to settle. 

Conclusion 

The bottom line is that an executor will most likely be appointed to help distribute the monies and assets alongside the trustee. Most times you will be unable to say to have an executor being appointed. However, there will be rare cases and special cases where an administrator will be appointed in place of an executor.