When making a Will, you’ll need to appoint an Executor. You might also need to appoint Trustees. Sometimes the same person does both jobs. Sometimes they’re different people with different roles.
If you’re confused about the difference, you’re not alone. These terms are often used interchangeably in casual conversation, but they actually refer to distinct legal roles with different responsibilities and timeframes.
Understanding the difference is important, both when making your Will and when you’re asked to act in one of these roles.
What does an Executor do?
Your Executor (also called legal personal representative) is the person responsible for administering your estate after your death. Think of them as the project manager for wrapping up your affairs.
The Executor’s role is temporary. It begins when you die and ends when your estate is fully administered and assets are distributed to beneficiaries. This process typically takes anywhere from six months to two years, depending on the complexity of the estate and what assets are involved.
Key Executor responsibilities
Arranging the funeral
While family members usually make these decisions together, the Executor has the legal authority to make funeral arrangements. Making wishes known during lifetime (including in your Will) can make the Executor’s job more straightforward and avoid potential arguments between family members.
Locating the Will and obtaining probate
The Executor must find your original Will, apply to the Supreme Court of Western Australia for a Grant of Probate (the court order that confirms the Will is valid and authorises the Executor to act), and deal with any issues that arise – including estate disputes or Family Provision claims.
Identifying and protecting estate assets
The Executor needs to work out what you owned, secure those assets, and ensure they’re properly protected. This might involve changing locks, arranging insurance, or moving valuable items to safe storage. It also involves contacting institutions like banks and superannuation funds to notify them of your death, confirm balances, and gather the necessary instructions to call funds into your estate.
Valuing the estate
The Executor must obtain valuations of significant assets, particularly real estate and business interests. Bank account and superannuation balances must also be obtained, if these are due to come into the estate.
Paying debts and liabilities
All valid debts must be paid before the estate can be distributed to beneficiaries. This can include discharging or refinancing mortgages, paying credit card debts, personal loans, tax liabilities, funeral expenses, and estate administration costs.
Dealing with tax matters
Your Executor must lodge your final income tax return, obtain a clearance certificate from the Australian Taxation Office, and deal with any capital gains tax arising from the sale of estate assets. Engaging an accountant for this process is common, to ensure all tax obligations are met and the estate account is properly reconciled.
Distributing the estate
Once debts are paid and any waiting periods have expired (such as the 6-month timeframe for Family Provision claims), the Executor distributes remaining assets to beneficiaries according to the Will.
Maintaining accounts
The Executor must keep detailed records of all estate receipts and payments, and provide accounts to beneficiaries when requested.
When the Executor’s job ends
For a simple estate where everything is distributed outright to adult beneficiaries, the Executor’s job ends once the distribution is completed. They’ll typically ask beneficiaries to sign documents acknowledging receipt of their inheritance and releasing the Executor from further liability.
At that point, the Executor’s role is finished. The assets now belong to the beneficiaries, and the Executor has no further involvement or responsibility.
Get our ultimate FAQ guide on all things inheritance, Wills, estates and succession.
What does a Trustee do?
A Trustee is someone who legally holds and manages assets on behalf of beneficiaries. Unlike an Executor’s temporary role, a Trustee’s role can last for years or even decades.
Trustees are appointed when your Will creates an ongoing trust rather than simply distributing assets outright. This is common when:
- Beneficiaries are children or young adults
- You want to protect assets from relationship breakdowns or creditors
- A beneficiary has a disability and you want to preserve their Centrelink benefits
- You want to give someone the benefit of using an asset, or provide income to them, during their lifetime – with the capital passing to other beneficiaries later
- You want a responsible, independent person to manage assets for beneficiaries who aren’t good with money or lack the capacity to make decisions for themselves
Key Trustee responsibilities
Managing trust assets
The Trustee must actively manage the assets held in trust. This might involve investing funds, maintaining real property, running a business, or making decisions about buying and selling assets.
Making distributions
The Trustee decides when and how much to distribute to beneficiaries, within the parameters set by the trust deed or Will. This requires balancing the needs of different beneficiaries and considering tax implications.
Acting in beneficiaries’ best interests
Trustees have strict legal obligations to act in the best interests of beneficiaries, avoid conflicts of interest, and exercise their powers properly and in good faith. These are known as fiduciary duties.
Keeping accurate records
Trustees must keep detailed accounts of all trust transactions and provide regular reports to beneficiaries. Usually an accountant is involved to help with accurate record keeping.
Complying with tax obligations
Trusts have their own tax obligations. The Trustee must lodge trust tax returns, issue distribution statements to beneficiaries, and ensure the trust tax affairs are properly managed.
Continuing role
The Trustee’s role continues for as long as the trust exists, which might be until beneficiaries reach a certain age, until certain events occur, or until the trust is wound up or vested. In WA, the maximum lifespan of a trust is 80 years.
When one person does both jobs
In many Wills, the Executor and Trustee roles are performed by the same person. This can seem to make sense because the Executor, having administered the estate, simply continues on as Trustee of any ongoing trusts created by the Will.
However, it’s important to understand that they’re wearing two different hats:
- As Executor, they’re winding up the estate and distributing it according to the Will.
- As Trustee, they’re holding and managing assets for beneficiaries on an ongoing basis.
The transition from Executor to Trustee happens when the estate administration is complete and the Executor transfers assets into the trust they’re holding as Trustee.
Example: Estate with minor children
Let’s say your Will leaves your estate to your two children aged 8 and 10, with the gift held in trust until they each turn 25.
Your Executor would:
- Apply for probate
- Identify and value your assets
- Pay your debts
- Deal with tax matters
- Transfer the remaining estate assets into the testamentary trusts for your two children, depending how you have set these up in your Will.
Then, as Trustee, the same person would:
- Invest the trust funds prudently
- Make distributions for the children’s education, maintenance, advancement and benefit
- Transfer each child their respective share when they turn 25
- Keep accounts and lodge trust tax returns each year
- Continue managing the trust for up to 17 years (until the youngest child turns 25)
Can you appoint different people?
Yes, you can appoint different people as Executor and Trustee, and there is often good reason for doing so – particularly if your estate is on the larger side, or there are other complexities. Different skills are needed for each role.
You might want different people as Trustees if:
- Your chosen Executor is good at wrapping up estates but doesn’t want the long-term commitment of Trusteeship
- You want an independent person or a professional Trustee (like a Trustee company) to manage ongoing trusts, separate from who handled the initial estate administration
- You want your children to be Trustees of their own trusts
The Executor would complete the estate administration and then hand over assets to the Trustee, who takes over management from that point.
Can you have multiple Executors or Trustees?
Yes. You can appoint:
- Multiple Executors to act jointly
- Multiple Trustees to act jointly
You can (and should) also consider appointing one or more substitute Executors or Trustees, in case your first or second preferences cannot act for some reason. This helps to future-proof your Will in the event that you don’t get around to updating it, or if unforeseen circumstances arise.
Having joint Executors or Trustees provides backup if one dies or can’t act, and can spread the workload. However, it can also create challenges if the appointees disagree about decisions.
Generally, we recommend no more than two or three Executors or Trustees acting jointly, and they should be people who can work together cooperatively. This can be one of the most crucial decisions when writing your Will.
Professional Executors and Trustees
You don’t have to appoint family members or friends. You can appoint:
- A solicitor
- An accountant
- A Trustee company
- A combination of professional and family members
Professional Executors and Trustees bring expertise and impartiality, but they charge fees (usually calculated as a percentage of the estate or trust value). For complex or high-value estates, or where ongoing trust management is needed, this can be money well spent.
What if someone doesn’t want the job?
Being appointed as Executor or Trustee in someone’s Will doesn’t obligate you to accept the role. You can decline (called “renouncing”).
If you’re the only appointed Executor or Trustee and you renounce, alternative arrangements need to be made. This might involve:
- A substitute Executor or Trustee named in the Will taking over
- Beneficiaries applying to the Court for someone else to be appointed
- The Public Trustee being appointed to administer the estate
This is why it’s wise to appoint substitute Executors and Trustees in your Will, and to discuss the appointment with people before naming them.
Key differences at a glance
Executor:
- Temporary role (months to a couple of years)
- Winds up the estate
- Pays debts and distributes assets
- Role ends when estate is distributed
Trustee:
- Ongoing role (potentially years or decades)
- Manages assets for beneficiaries
- Makes investment and distribution decisions
- Role continues until trust ends
Both:
- Owe legal duties to beneficiaries
- Must act honestly and in good faith
- Must keep proper accounts
- Can be the same person or different people
Questions to consider when making your Will
- Who has the time, skills, and willingness to act as your Executor?
- If your Will creates ongoing trusts, who would be suitable Trustees?
- Should you appoint the same person as both Executor and Trustee?
- Should you appoint professional Executors or Trustees?
- Do you need to appoint substitutes in case your first choices can’t act?
These are important decisions that affect how your estate will be managed and how your beneficiaries will be looked after one day. Having the right people in charge can make all the difference
Final thoughts
Understanding the difference between Executors and Trustees helps you make better decisions when preparing your Will and helps you understand what’s involved if you’re asked to act in one of these roles.
Executors administer estates – they’re project managers with a defined task and endpoint. Trustees manage assets on an ongoing basis – they’re long-term asset managers and decision-makers.
Both roles carry significant responsibilities and potential liabilities. Both require people who are trustworthy, capable, and willing to act.
At Solomon Hollett, our estate planning lawyers can help you think through who should act as your Executor and Trustee, explain the responsibilities involved, and structure your Will to give them appropriate powers and protections.
If you’ve been appointed as an Executor or Trustee and need guidance about your obligations, we’re here to help with that too.
