Executor vs. Fiduciary

Attribute	Executor	Fiduciary
Definition	Person appointed to carry out the terms of a will	Person entrusted to manage assets on behalf of another
Responsibilities	Administering the estate, distributing assets, paying debts	Acting in the best interest of the beneficiary, managing assets
Legal role	Named in a will or appointed by a court	Can be a trustee, guardian, or agent
Accountability	Accountable to the court and beneficiaries	Accountable to the person who appointed them

Definition and Responsibilities

Executors and fiduciaries are both individuals who are entrusted with managing the affairs of another person, typically after their death. An executor is specifically named in a person's will to carry out their final wishes, including distributing assets to beneficiaries and settling debts. On the other hand, a fiduciary is a broader term that refers to any person who is legally obligated to act in the best interests of another party. This can include trustees, guardians, and agents appointed under a power of attorney.

Legal Authority

One key difference between an executor and a fiduciary is the source of their legal authority. Executors derive their authority from the deceased person's will, which is a legally binding document that outlines how their assets should be distributed. Fiduciaries, on the other hand, may be appointed by a court or by the terms of a legal agreement, such as a trust document. This distinction can impact the scope of their responsibilities and the level of oversight they are subject to.

Decision-Making Power

Executors and fiduciaries also differ in terms of their decision-making power. Executors are typically given broad discretion to make decisions regarding the administration of the deceased person's estate, as long as they are acting in accordance with the terms of the will. Fiduciaries, on the other hand, may have more limited authority depending on the specific terms of their appointment. For example, a trustee may be required to follow specific investment guidelines outlined in a trust document.

Accountability and Oversight

Another important distinction between executors and fiduciaries is the level of accountability and oversight they are subject to. Executors are generally required to provide regular accountings to the beneficiaries of the estate, as well as to the court overseeing the probate process. Fiduciaries, on the other hand, may be subject to oversight by a court-appointed guardian or by a trust protector, depending on the terms of the legal agreement that appointed them.

Compensation

Executors and fiduciaries may also differ in terms of compensation. Executors are typically entitled to receive a fee for their services, which is usually based on a percentage of the value of the estate. Fiduciaries, on the other hand, may or may not be entitled to compensation depending on the specific terms of their appointment. For example, a trustee may be entitled to reasonable compensation for their services, while a guardian may not be entitled to any compensation.

Liability and Protection

Executors and fiduciaries also differ in terms of the liability they may face for their actions. Executors are generally protected from personal liability as long as they are acting in good faith and in accordance with the terms of the will. Fiduciaries, on the other hand, may be held personally liable for any losses incurred as a result of their actions, especially if they are found to have breached their fiduciary duties. This difference in liability can impact the level of risk associated with serving as an executor or fiduciary.

Conclusion

In conclusion, while executors and fiduciaries share some similarities in terms of their roles and responsibilities, there are also key differences that distinguish the two. Executors derive their authority from a deceased person's will and are responsible for carrying out their final wishes, while fiduciaries may be appointed by a court or by the terms of a legal agreement and are obligated to act in the best interests of another party. Understanding these differences can help individuals make informed decisions about who to appoint to manage their affairs after their death.