Louisiana trust and estate planners encounter three common legal roles regularly, the roles of Executor, Administrator, and Trustee. Clients often confuse these roles because the rights and responsibilities of the Executor, Administrator, and Trustee are similar. Additionally, the same person(s) often fills more than one of these roles simultaneously. For these reasons, examining the sometimes subtle differences between the three roles carries value for clients and potential clients. First, let’s look at the role of Executor in Louisiana.

Executors

Executor is a term referring specifically to a person or entity named in your Last Will and Testament. The Executor is responsible for executing your will and administering the assets and liabilities of your estate. In a succession, Louisiana courts grant Executors power to act with a promise from the Executor to act in the best interest of the heirs. Executor activities include closing banking and investment accounts titled in your name at death, paying your final bills, and selling assets that the family will not retain. Upon fully consolidating the assets of the estate, the Executor then accounts for their actions to the court and heirs. Finally, the Executor distributes the assets in proper proportions to the heirs according to your wishes. As you can likely gather, the Executors acts with court permission and supervision in their role.

Administrators

When you don’t write a will, the court calls the person in charge of disposing of your estate your Administrator. The Administrator carries out all of the same activities as the Executor under court supervision. The only real differences lie in the terminology and in the distribution of the assets once the estate is administered. Instead of distributing assets according to your will, Administrators distribute assets based on a set of laws governing the distribution. We refer to these laws as intestacy. While the Executor and Administrator role are nearly synonymous, the Trustee role holds many more differences.

Trustees 

Unlike Executors or Administrators, Trustees only exist when a trust is present in your Louisiana estate plan. You may have a testamentary trust, which is a trust built into your will. Or you may have a living trust,  a trust established and filled with assets during your lifetime. With a testamentary trust, a Succession remains a necessity for the settlement of your estate. With a living trust we can avoid the need to file a succession with the courts.

Testamentary Trusts

In a succession court proceeding, a court legally recognizes the existence of a testamentary trust as an heir to your estate. The Executor of your estate transfers the portion of your estate payable to the trust to a person called a Trustee. The Trustee will then manage the portion left to the testamentary trust by your will and distribute it according to your instructions. Your Will instructs the trustee on when and how funds will be distributed to the heirs and for which purposes. Often families establish testamentary trusts in Wills to spread out the distribution of their estate over a longer time horizon. This strategy is especially useful for families with minor children or disabled children. Additionally, the Trustee and Executor are often the same person.

Living Trusts

When you establish a living trust, you will likely be the Trustee of your own trust for your lifetime. This means you retain management over the assets in trust as long as you are able. When you die or become incapacitated, you have someone named as your successor Trustee to fill the role when you are gone.  After your passing, the Successor trustee carries out many of the same actions as the Executor or Administrator. They sell trust property, consolidate trust funds and investments, and distribute the trust assets according to your wishes. The key difference lies in the fact that the Trustee administers your trust without court supervision and outside of a succession proceeding. Avoiding a succession proceeding saves time and cost, and keeps the settlement of your estate private.

With proper planning, you will ensure that the right people are placed in the right roles, and that the settlement of your estate will be as pain free as possible. To learn more about which  Louisiana Estate Planning strategy will work best for your family reach out to Legacy Law Center at (504) 274-1980 in Metairie, New Orleans, and surrounding areas or call (985) 246-3020 in Mandeville, Covington, Slidell, and surrounding areas.