Executor and trustee are terms applied to those individuals who have been tasked with handling the will of a deceased person. While the responsibilities of an executor and trustee remain the same, differences exist in how the two are appointed to carry out the deceased’s wishes according to his or her will.
A will is a legal document which outlines the distribution of assets and debts upon the death of someone. If a person has not written a will before passing away, then all of his or her assets and liabilities, usually referred to as estate, will be distributed or disposed in accordance with the law.
If you have died intestate i.e. without a will, then an executor is appointed to handle all your affairs as defined by the law in your state. The executor will identity your heirs and beneficiaries, recognize and pay all the liabilities, and further take out legal fees. He or she will work for the probate court, a special court designed to handle such cases. One can further appoint an executor, who will execute the will according to your wishes.
If you don’t opt for this route, then the other option at your disposal is to name a trustee, i.e. put all your money in a trust rather than owning it yourself. Upon your death, the trustee will then take control of all your assets and distribute your belongings according to your will.
The major difference between the two comes in the overall cost. Even if you had appointed an executor, the legal cost of probate court is relatively expensive when compared to a trustee, who will only be compensated for the work he or she does for the trust. An executor therefore, works on behalf of the probate court whereas the trustee is acting on behalf of the settlor, with little to no interference from a state body.