If you’re not sure what a fiduciary is and you’re thinking about doing some estate planning in Texas, it’s important to look into exactly what this term means and the different types that are used. At its root, a fiduciary is an entity that works for you during this process. It can be a person — this is very common — but it could also be a trust company or a bank. They all perform similar functions in distributing your wealth after you pass away.
The first type of fiduciary is a trustee, and this term can be used with all of the above examples — a bank, an individual or a trust company. The trustee is given your property or wealth and legally owns it, but the trustee is also obligated to do whatever is mandated by the trust. For example, an educational trust for your grandchildren may pay out money to cover their tuition, but nothing else.
The next type is known as an executor. This is similar to a trustee, but an executor will often be used when there is not a trust fund, and the executor is responsible for referring to the will and doing what the will instructs. For instance, the executor may inform the family members of what wealth and property has been left for them and then work to get it into their possession. Often, this all happens at one time, rather than utilizing the long-term distribution of a trust.
A personal representative is virtually identical to an executor; this is simply another term used to describe the same job. The personal representative may also need to sign certain legal documents.
Source: American Bar Association, “Guidelines for Individual Executors & Trustees,” accessed May. 04, 2015
