Can your personal representative be the same person as your trustee?
Yes, you can name the same person to be both the personal representative of your estate and the trustee of any trusts you create.
What is the difference between a personal representative and a trustee?
The main difference between the a personal representative and a trustee is that the personal representative manages the estate while the trustee manages a trust. Additionally, the personal representative is appointed by a court, unlike a trustee.
A personal representative—also called an executor—is in charge of your estate. This is the person that pays your bills and taxes, contacts creditors, sorts through your stuff, and eventually distributes your assets after you pass away. The personal representative takes legal title of all the assets in your estate after you die and holds those assets temporarily. Because the personal representative holds legal title to the assets even though the assets are really for someone else (like beneficiaries named in your will), the personal representative is a fiduciary.
A trustee is in charge of all the assets in a trust. This can be a living revocable trust, a special needs trust, a testamentary trust, or any other kind of trust. However, it will typically be one of those three if the trust is made in an estate planning context. Like the personal representative, the trustee takes legal title of property that is really intended for someone else. Thus, a trustee is also a fiduciary.
To understand the big difference between the two, consider a trust asset and an estate asset. If an asset is part of a trust, it is under the management of the trustee. If the asset is part of an estate, then it is under the management of the personal representative. You know an asset is in trust if the legal title is in the name of a trustee or if the trust document transferred title. However, if the asset is not in true and doesn’t immediately transfer title on death, the asset is part of your estate.
Should I appoint the same person as personal representative and trustee?
Often, it is a very good idea to make the personal representative and trustee the same person. Both handle assets for you after death. And usually the process is easier if both roles are handled by the same person. Otherwise, a lot of time and energy is wasted by the two people just trying to coordinate.
Imagine, for example, that Abigail died with a living revocable trust. As us the case for most living revocable trusts, she had a pour-over will, dumping all assets still in the estate into the trust. However, Abigail name Peter to be her personal representative and Tom to be trustee. So now Peter must take legal title of everything in the estate and then immediately transfer that same title to Tom, who will then later transfer title to beneficiaries. Clearly, making the same person personal representative and trustee would have been a lot more efficient.
Deciding who should be a fiduciary is a big decision, and it is wise to seek legal counsel when making that decision. If you are designating someone to be a fiduciary, call an estate planning attorney for a free consultation.