When creating an estate plan, many Texas residents plan to rely on their family members. For instance, they may select one of their adult children to serve as the executor of their will. Some may choose the same person to act as their trustee. However, the positions of trustee and executor are entirely different. For one, your executor only acts as your executor for a short period of time. And, in acting as your executor, they can hire an attorney to help.
Conversely, your trust may be long-lasting, meaning it will outlive your executor family member. In addition, trust administration is more than just hiring an attorney. Depending on your trust, you may need brokerage and investment help, property management help, legal assistance and even, CPAs. Your executor would need to hire each of these people, which could detrimentally drain your trust’s assets.
Is a trustee a job?
Yes. Your trustee works for your trust at your direction through the organizational documents. Trusts have IRS and state legal requirements, documentation collection and information maintenance, as well as reports that must be sent to your beneficiaries. If this sounds like a job, it is because a trustee is a job.
Is liability an issue?
Yes. Your trustee could be personally liable for their decisions, so they need liability insurance to ensure they can pay back your trust, should the need arise. In addition, there should be some insurance or protection for your trust as well, and your executor family member likely cannot provide these services.