Yesterday I posted the estate planning term of the week - Trustee. If your estate plan includes a Revocable Living Trust or some other type of trust, then you will need to understand the difference between a Personal Representative and a Trustee. While both are types of "Fiduciaries," they each play a very different role in an estate plan.
A Personal Representative is appointed by a probate judge to oversee the administration of a probate estate and can be a person, an institution, such as a bank or trust company, or a combination of both. If the decedent had a Last Will and Testament, then in most cases the probate judge will appoint the Personal Representative named in the Last Will. If the decedent did not have a Last Will, then state law will dictate who the probate judge should appoint to serve as the Personal Representative.
On the other hand, a Trustee is named by the person who creates a trust, called the Trustmaker - which happens to be last week's estate planning term - to oversee the day to day management of property owned by the trust for the benefit of the trust beneficiaries. As with a Personal Representative, a Trustee can be a person, an institution, or combination of both. In the typical situation, the Trustmaker, Trustee and Beneficiary of a Revocable Living Trust are one in the same person, but if the Trustmaker becomes disabled or dies, then a successor Trustee will step in to manage the trust property.
Ideally if you have a fully funded Revocable Living Trust, then your estate will avoid probate and your heirs will not need a Personal Representative at all.