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When people start estate planning, they focus on one urgent question: who gets my assets when I am gone? So they draft wills, establish trusts, and name beneficiaries. Underneath that sits an unexamined assumption — that once the paperwork is signed, the transfer is automatic. That the named executor or trustee will simply pick up the documents and hand out checks.
In reality, executing an estate is not a clerical formality. It is a business. Whether governed by a will in probate court or managed privately through a revocable living trust, wrapping up a life means working through a series of strict legal, financial and administrative duties.
If we use a will, that person is called an executor. If we use a revocable living trust, that person is called a successor trustee… It obviously needs to be somebody who has a little more financial acuteness or business mentality because that is the business of wrapping up somebody’s life. It’s not just a matter of, oh, here’s the will, let me do what it says.
Renee Parris, Estate Planning, Simplified
Three Duties That Come Before Any Heir Is Paid
Whether the estate runs through a will or a trust, three core duties have to be satisfied before a beneficiary receives anything. They sit in a statutory order that cannot be bypassed by the terms of a will or the wishes of the heirs.
1. Funeral and Administration Expenses
In virtually every jurisdiction, funeral and burial costs, along with the administrative costs of settling the estate, take priority over all other claims. Under the Uniform Probate Code these rank at the top of the claim hierarchy and must be satisfied before general creditors or beneficiaries see anything. If the estate lacks the liquid cash, the fiduciary has to liquidate something or the family has to front it.
Before anybody gets a penny out of the estate, funeral expenses have to be paid. By state law, that happens first… That’s when we see those GoFundMe campaigns to help pay for somebody’s funeral… Because nothing can be distributed from an estate until the funeral is paid first.
Renee Parris, Estate Planning, Simplified
2. Legitimate Creditors
The second duty is to identify, verify and pay the decedent’s outstanding debts. A fiduciary who ignores creditors in a rush to distribute can be held personally liable up to the value of what was distributed. In probate, the executor publishes a formal notice to creditors and notifies known creditors directly, opening a statutory claim window that typically runs several months.
In a trust administration there is no court-monitored clock, but the obligation remains — the assets of a revocable trust are still subject to the settlor’s creditors.
All of us die owing somebody. Half a month cell phone bill, utility bill, medical bills, whatever it is, nobody dies without owing somebody. Those creditors deserve to get paid… In a trust, there is no probate. There is no clock. But the creditors still have to get paid.
Renee Parris, Estate Planning, Simplified
3. The Final Tax Returns
The third duty is notifying the government and settling tax liabilities. The fiduciary is responsible for filing the decedent’s final federal income tax return for the year of death, and, if the estate generates income during administration, a fiduciary income tax return as well. Distributing assets before settling with the IRS can leave the fiduciary personally liable for the unpaid tax.
The third thing they must do is let the IRS know you’re gone. They do that by filing your last and final tax return… But the first three responsibilities are the same. Pay your funeral expenses, pay your creditors, and do your final tax return.
Renee Parris, Estate Planning, Simplified
Where the Two Paths Diverge
Once those three are satisfied, the executor’s path and the trustee’s path separate sharply.
Under a will, the executor’s authority comes from and is monitored by the probate judge. No inheritance can be distributed until the court closes the creditor window and approves a final accounting. The process is public and rigid and commonly runs nine to eighteen months. The upside is a clean legal cutoff: once probate closes, the executor is shielded from later claims.
Under a trust, the successor trustee works privately, outside court supervision. That privacy carries a cost — there is no judge signing off, so the trustee must manage trust accounting meticulously and obtain formal releases from beneficiaries to limit their own exposure. Distribution can happen in weeks rather than months. But if the trust includes staggered distributions, say to children at specific ages, the role can run for decades, with ongoing investment management and reporting.
Choosing the Right Person
Understanding the real burden is exactly why this choice matters. Naming an executor or trustee should never be an honorary award. It is a business appointment. Naming a child or sibling to make them feel included, when they lack financial acumen, organizational discipline, or the resolve to stand up to demanding heirs, sets them up to fail and exposes the estate to delay and litigation.
A good fiduciary needs competence, or at minimum the humility to hire the estate attorney and CPA who have it. Choosing someone who can handle the stress and execute with integrity is itself an act of care — for your heirs and for the person you are asking to stand in your shoes.
About the instructor: Renee Parris is an estate planning educator with over 30 years of experience. This article is a companion piece to Renee’s course, Estate Planning, Simplified.
Sources
- Renee Parris, Estate Planning, Simplified, Module 3, Lesson 2 — course transcript.
- Uniform Probate Code — priority of claims against an estate and notice-to-creditors requirements.
- Uniform Trust Code — creditor claims against the assets of a revocable trust.
- Internal Revenue Code — the fiduciary’s obligation to file a decedent’s final return and, where applicable, a fiduciary income tax return.
This article is for educational purposes only and does not constitute legal, tax, or financial advice. Consult a qualified estate planning attorney or licensed professional in your jurisdiction to understand the specific fiduciary laws, creditor claim timelines, and tax requirements in your state.
