Learn something new every day More Info... by email
A trust is an inheritance instrument that allows for the timed distribution of funds after death. Most of the time, trusts are very specific with respect to who should get what and when, but the trust itself cannot make distributions. That is the role of the executor of a trust. The executor of a trust is a person who is chosen by the trust owner to facilitate the trust after the owner has died. This person typically has full responsibility for managing the trust, including making the appropriate tax and probate filings, handling distributions, and accounting for changed circumstances. Executing a trust can take years, if not decades, depending on the trust’s complexity and value.
The most basic job of the executor of the trust is to distribute the trust’s funds according to the trust’s instructions. Unlike a will, which usually stipulates a one-time distribution, a trust fund generally anticipates the slow distribution of money or assets over time. Sometimes, trust money is required to be invested in certain bonds or stocks, either pre-selected or of the executor’s choosing. Other times, the money is meant to go directly to individuals. It is common for trusts to place conditions on distribution.
A trust clause may direct that money be given to a grandchild once that child turns 18 or graduates college, or might provide a monthly payment to a child so long as she remains married or provided she and her family still live in the family home. The executor of a trust is the person responsible for making sure that payments follow the letter of the trust, and it is his or her job to make sure than any conditions are being met. This individual is required by law to follow the trust’s instructions exactly. In certain circumstances, this can make the executor of a trust a rather unpopular person.
Becoming a trust executor is something that is usually stipulated, not volunteered for. Most of the time when a person is drafting a trust instrument, he or she will ask a trustworthy relation to serve as executor. Sometimes, a family attorney or financial adviser serves as the executor. Other times, the executor is a family member, even one of the beneficiaries.
By assuming executive duty over the trust, the executor becomes what is known in law as a fiduciary. Fiduciaries are legally responsible for the just and proper management of assets. These responsibilities open the executor up to lawsuit from any beneficiary who questions the executor’s actions.
One can always decline service as the executor of a trust, and accepting should never be taken lightly. The responsibilities of executing a trust are often extensive. Managing relatives, enforcing sometimes arbitrary conditions, and properly filing complex tax and probate paperwork are all routine parts of the job. Depending on the trust size and the number of beneficiaries, the job of executor can stretch out for decades.
In smaller estates, the executor of a trust is sometimes also tasked with serving as the general estate executor, although these are different types of executors. An executor of an estate is the person who oversees all death-time distributions of property, both that which is listed in the will and that which is not. The estate executor is usually also responsible for planning final arrangements, such as a funeral service, as well as handling the legal side of the estate. Trusts usually operate separately from standard estates, but there is generally no reason why they cannot be handled together.
One of our editors will review your suggestion and make changes if warranted. Note that depending on the number of suggestions we receive, this can take anywhere from a few hours to a few days. Thank you for helping to improve wiseGEEK!