Trustee vs. Agent — What's the Difference?
By Tayyaba Rehman — Updated on November 5, 2023
A trustee holds and manages assets in a trust for beneficiaries, whereas an agent acts on behalf of another person or entity.
Difference Between Trustee and Agent
Table of Contents
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Key Differences
A trustee is an individual or organization that holds legal title to assets for another person or group, called beneficiaries. The trustee has a fiduciary responsibility, which means they must act in the best interests of the beneficiaries and follow the terms of the trust. An agent, however, is someone who has been authorized to act on behalf of another person, known as the principal, in dealings with third parties.
Trustees have a legal obligation to manage assets within a trust in a way that benefits the beneficiaries, according to the trust's stipulations. This role is typically long-term and involves a high level of responsibility and discretion. Agents, by contrast, are appointed to perform specific tasks or transactions on behalf of their principals and their authority is generally limited to the scope of their agency agreement.
The role of a trustee is often associated with estate planning, where individuals set up trusts to manage their assets before and after their death. Trustees must be impartial, ensuring the trust's assets are distributed fairly as per the trust document. An agent’s role is more diverse and can include situations ranging from real estate transactions to legal representations, where they are expected to act in the principal's best interest for a particular purpose.
In a legal context, a trustee cannot typically benefit from their position unless specifically allowed by the trust document, whereas an agent might be paid for their services and can negotiate their compensation. The trustee's authority comes from a trust document, while an agent's authority is derived from an agency agreement or contract.
The concept of a trustee centers around the trust relationship and the trustee’s duty to the trust itself and its beneficiaries. On the other hand, an agent focuses on the principal-agent relationship, where the agent’s primary duty is to the principal while engaging with third parties on the principal’s behalf.
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Comparison Chart
Role
Manages trust assets for beneficiaries.
Acts on behalf of a principal in specific matters.
Authority Source
Derived from a trust document.
Derived from an agency agreement or power of attorney.
Responsibility
Fiduciary duty to the trust and beneficiaries.
Duty to act in the principal’s interest in agency scope.
Duration of Role
Usually long-term until the trust is dissolved.
Often short-term or for specific transactions.
Benefit from the Role
Cannot benefit unless allowed by the trust document.
Can negotiate compensation for their services.
Compare with Definitions
Trustee
Trustees are responsible for the maintenance and oversight of assets within a trust.
As trustee, he distributes income from the trust to the beneficiaries annually.
Agent
A person who looks for work for another person
Trustee
A trustee is a person or firm that holds and administers property or assets for the benefit of a third party.
The trustee ensured the trust's assets were invested wisely.
Agent
An agent is a person authorized to act on behalf of another person or organization.
The author's agent negotiated a lucrative book deal.
Trustee
A trustee manages a trust's affairs and has a legal obligation to act in the beneficiaries' best interests.
She was appointed trustee of her nephew's inheritance.
Agent
An agent represents another person's interests in commercial or legal matters.
As my agent, he has the power to sign contracts on my behalf.
Trustee
A trustee can be an individual, a bank, or a trust company that acts as the legal owner of trust assets.
The trust document named a corporate trustee to manage the complex assets.
Agent
An agent can be a professional engaged in business activities like selling or managing assets.
The insurance agent offered several policies to cover my home.
Trustee
Trustee (or the holding of a trusteeship) is a legal term which, in its broadest sense, is a synonym for anyone in a position of trust and so can refer to any person who holds property, authority, or a position of trust or responsibility to transfer the title of ownership to the person named as the new owner, in a trust instrument, called a beneficiary. A trustee can also refer to a person who is allowed to do certain tasks but not able to gain income, although that is untrue.
Agent
In legal terms, an agent is empowered to affect the legal status of their principal through their actions.
The sports agent entered into negotiations for the athlete's next contract.
Trustee
(Law) The person in a trust relationship who holds title to property for the benefit of another.
Agent
A person who acts on behalf of another person or group
In the event of illness, a durable power of attorney enabled her nephew to act as her agent
Trustee
A member of a board elected or appointed to direct the funds and policy of an institution.
Agent
A person or thing that takes an active role or produces a specified effect
Universities are usually liberal communities that often view themselves as agents of social change
Trustee
A country responsible for supervising a trust territory. See Usage Note at -ee1.
Agent
One that acts or has the power or authority to act.
Trustee
To place (property) in the care of a trustee.
Agent
One empowered to act for or represent another
An author's agent.
An insurance agent.
Trustee
To function or serve as a trustee.
Agent
A means by which something is done or caused; an instrument.
Trustee
A person to whom property is legally committed in trust, to be applied either for the benefit of specified individuals, or for public uses; one who is intrusted with property for the benefit of another.
Agent
A force or substance that causes a change
A chemical agent.
An infectious agent.
Trustee
A person in whose hands the effects of another are attached in a trustee process.
Agent
A representative or official of a government or administrative department of a government
An FBI agent.
Trustee
(transitive) To commit (property) to the care of a trustee.
To trustee an estate
Agent
A spy.
Trustee
(transitive) To attach (a debtor's wages, credits, or property in the hands of a third person) in the interest of the creditor.
Agent
(Linguistics) The argument that expresses the means or cause of an action or event described by a phrase or clause. The noun John is the agent in the clause John threw the ball.
Trustee
A person to whom property is legally committed in trust, to be applied either for the benefit of specified individuals, or for public uses; one who is intrusted with property for the benefit of another; also, a person in whose hands the effects of another are attached in a trustee process.
Agent
To act as an agent or representative for
Who will agent your next book?.
Trustee
To commit (property) to the care of a trustee; as, to trustee an estate.
Agent
To act as an agent or representative.
Trustee
To attach (a debtor's wages, credits, or property in the hands of a third person) in the interest of the creditor.
Agent
One who exerts power, or has the power to act
Trustee
A person (or institution) to whom legal title to property is entrusted to use for another's benefit
Agent
One who acts for, or in the place of, another (the principal), by that person's authority; someone entrusted to do the business of another
Trustee
Members of a governing board
Agent
Someone who works for an intelligence agency
Trustee
Trustees have a fiduciary duty to manage the trust in a way that does not benefit themselves personally.
The trustee recused herself from decisions where there was a conflict of interest.
Agent
An active power or cause or substance; something (e.g. biological, chemical, thermal, etc.) that has the power to produce an effect
Agent
(computing) In the client-server model, the part of the system that performs information preparation and exchange on behalf of a client or server. Especially in the phrase “intelligent agent” it implies some kind of autonomous process which can communicate with other agents to perform some collective task on behalf of one or more humans.
Agent
(grammar) The participant of a situation that carries out the action in this situation, e.g. "the boy" in the sentences "The boy kicked the ball" and "The ball was kicked by the boy".
Agent
(gambling) A cheat who is assisted by dishonest casino staff.
Agent
Acting; - opposed to patient, or sustaining, action.
Agent
One who exerts power, or has the power to act; an actor.
Heaven made us agents, free to good or ill.
Agent
One who acts for, or in the place of, another, by authority from him; one intrusted with the business of another; a substitute; a deputy; a factor.
Agent
An active power or cause; that which has the power to produce an effect, such as a physical, chemical, or medicinal agent; as, heat is a powerful agent.
Agent
A chemical substance having biological effects; a drug.
Agent
An active and efficient cause; capable of producing a certain effect;
Their research uncovered new disease agents
Agent
A substance that exerts some force or effect
Agent
A representative who acts on behalf of other persons or organizations
Agent
A businessman who buys or sells for another in exchange for a commission
Agent
Any agent or representative of a federal agency or bureau
Agent
The semantic role of the animate entity that instigates or causes the hapening denoted by the verb in the clause
Agent
Agents carry out specific tasks as directed by the principal they represent.
The real estate agent listed the property for sale.
Common Curiosities
Is an agent the same as a power of attorney?
An agent can be appointed through a power of attorney, but not all agents are powers of attorney.
What does an agent do?
An agent acts on behalf of a principal to engage in transactions or deal with third parties.
Can a trustee also be a beneficiary?
Yes, a trustee can also be a beneficiary, but they must act impartially and in the interest of all beneficiaries.
What legal obligations does an agent have?
Agents have a duty to act within the authority given to them and in the best interest of the principal.
What are the legal obligations of a trustee?
Trustees have a fiduciary duty to act in the best interests of the trust and its beneficiaries.
Who can appoint an agent?
A principal appoints an agent, and this can be an individual or an entity.
Can a trustee be removed?
Yes, a trustee can be removed if they breach their fiduciary duties or by court order.
Can an agent’s authority be revoked?
Yes, a principal can revoke an agent's authority unless it is irrevocable by contract.
Are trustees paid for their work?
Trustees may be entitled to reasonable compensation for their services, as outlined in the trust document.
Do agents receive payment for their services?
Agents typically receive payment as agreed upon in the agency agreement.
What is the primary role of a trustee?
The primary role of a trustee is to manage and administer the property or assets in a trust for the benefit of the beneficiaries.
What happens when a trustee mismanages a trust?
Beneficiaries can take legal action against a trustee for mismanagement or breach of fiduciary duty.
Who can appoint a trustee?
A trustee is typically appointed by the person who creates the trust or by the court.
What is the consequence of an agent acting outside their authority?
Actions taken by an agent outside their authority may not bind the principal and can lead to legal action against the agent.
Can the roles of trustee and agent overlap?
The roles can overlap when a trustee is given agency authority to deal with certain assets, but they remain distinct in their primary functions.
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Written by
Tayyaba RehmanTayyaba Rehman is a distinguished writer, currently serving as a primary contributor to askdifference.com. As a researcher in semantics and etymology, Tayyaba's passion for the complexity of languages and their distinctions has found a perfect home on the platform. Tayyaba delves into the intricacies of language, distinguishing between commonly confused words and phrases, thereby providing clarity for readers worldwide.
