The differences between the role of a trustee and the role of a personal representative can be confusing because the lines often blur. These two roles are often fulfilled by the same person and have similar duties. However, there are also differences that are important to know when one is carrying out either of these roles.
First, let us take a look at what exactly both of these roles are. A trustee is the fiduciary of a trust. Often, the creator of the trust names themselves as the initial trustee and then names successor trustees. The successor trustee will become the trustee of the trust when the creator of the trust passes and will administer the trust. A personal representative, on the other hand, is the fiduciary named in a will, or by a court if there is no will. This person administers the probate estate after someone’s death. So, both roles involve administering assets after someone’s death, but with key differences. Let’s take a look at those differences.
First, the trustee and the personal representative have control over and administer different assets. The most important thing is how an asset is titled. If the asset is solely titled, then the asset will go through probate, and the disposition will be controlled by the will (if there is one). Since the asset is going through probate, the personal representative is the person who has access to and control over this asset. However, if the asset is titled in the trust, then the trustee will handle that asset. Knowing which assets are going through probate and which assets are in the trust is important so that the correct person is taking care of them. Even if the personal representative and the trustee are the same person, they may need different documentation in order to access the assets and administer the trust or probate estate.
Second, the trustee has control over the trust assets right away while the personal representative has to wait for approval from the court. Once someone passes away, their trustee can access their trust assets and administer their trust straight away. They have authority automatically. However, a personal representative cannot do the same. They have to get appointed by the court first in order to have any authority. The personal representative has to continue to go through the court during the entire probate process, while the trustee is free to act on their own.
One last major difference is that a trustee may be able to act during the person’s lifetime while the personal representative may only act after the death of the person. The person who created the trust may name someone as an initial trustee along with themselves. This means that the initial trustee has control over the assets while the person is alive. This can be helpful, especially if the person becomes incapacitated. After the person dies, the trustee then administers the trust. However, a personal representative only gains control over assets after the person dies and they are appointed to the court. They have no control or access to the assets while the owner of those assets is alive.
These are only some of the main differences between a personal representative and a trustee. If you are in either of these roles it is important to understand your responsibilities and the way you can carry them out. Reach out to us at Sinclair Prosser Gasior if you have any questions.
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