An important part of creating an estate plan is the selection of the person who will take over your financial matters for you after your death. If you have a living trust, that person is called the "successor trustee." If you have a will, that person is called the "executor."
Your successor trustee or executor should be someone who is physically and mentally capable of taking care of business. Some people might be too busy to be given this job. Others might be very nice but not well suited to handling business matters in a timely fashion. Preferably, the person designated should live close by; otherwise it might be very difficult for them to fulfill their responsibilities.
A will must go through the court probate process and everything that the executor does is under the supervision of the court. The executor has a precise set of rules to follow and strict timelines. The work includes getting all the property in the estate appraised, making reports to the court, and petitioning the court for approval of every action taken. The executor has to keep an exact accounting of all expenses paid and make a report to the court. In contrast, the successor trustee also has to deal with the estate assets and inform the beneficiaries of his or her actions but can do so in a much less formal fashion. In addition, the successor trustee does not have to get permission from a court before taking action or report his or her actions to a court. Because of this relative autonomy, a good successor trustee can get a simple trust estate settled in a couple of months whereas even a simple probate estate usually takes an average of 18 months to settle. Even though a successor trustee is not under court supervision and scrutiny, there is one key thing to note: the successor trustee can be held accountable in a court of law for any mismanagement or neglect of estate duties just as the executor can.
Besides court oversight, another major difference between successor trustees and executors is that California law provides a fee for executors. The fee is set by statute and based on the gross value of the estate. For example, if an estate is valued at $500,000, the probate representative will be paid $13,000 as a statutory fee. (By the way, this is the same amount the attorney is entitled to). The executor can waive the statutory fee, but most do not. During my handling of probates, I have seen family members get upset when they realize that their brother or sister is getting a larger share of the estate because they were named as the executor of the will. Where there is no will, the court will appoint someone as the estate representative. That person is called the administrator. I have also seen family members fight to be appointed as the administrator in order to receive the statutory fee.
In contrast to the fees paid in probate, the successor trustee is entitled to reasonable compensation for performing his or her duties unless the trust document provides otherwise. Reasonable compensation is usually an hourly rate determined by the prevailing wage rate for like work, the difficulty involved in handling the estate administration, and the relative skill and knowledge of the successor trustee. As a matter of practice, most persons creating a trust choose not to provide compensation to the successor trustee on the premise that that person will perform his or her duties out of love and/or respect for them. This is especially true where the successor trustee is also a beneficiary under the trust. If you are concerned with reducing the cost of administering your estate and the time involved, a living trust handled by a competent successor trustee is the way to go.