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can an executor of a will be a beneficiary

Serving as the executor of a will can be a bigger time commitment than many people might expect. Not only do you need to oversee the transfer of assets to the proper beneficiaries, but you also need to pay debts, close accounts and wrap up other miscellaneous affairs for the deceased. Many executors are attorneys or accountants who may not know the deceased very well. However, many times the executor is a close relative or spouse of the decedent (the person who has died). In these instances, the executor of the will may also be one of the beneficiaries named in the will. While that might seem strange, it’s actually a fairly common occurrence.

Consider working with a financial advisor as you build out your estate plan.

Can an Executor of a Will Be a Beneficiary?

The short answer is yes. It’s actually common for a will’s executor to also be one of its beneficiaries. This makes sense, as executors are better able to perform their duties when they are familiar with the decedent’s situation. Someone close enough to the decedent to be a beneficiary would have that familiarity and more.

The probate court system actually favors beneficiaries serving as executors in some cases. Probate courts in several states prioritize beneficiaries over other individuals when appointing executors.

The only typical situation in which a beneficiary couldn’t also serve as executor would be if the individual was generally unqualified to serve as executor. This would be the case if she was under 18 years old, if she had a past felony conviction or if she was a non-relative living out of state in some cases.

Potential Upsides

The advantages of having a beneficiary serve as executor are fairly easy to suss out. If you are a beneficiary, that means that you probably had a close relationship with the deceased. It’s unlikely the decedent would have left you a bequest if you didn’t.

Consequently, your relationship with the deceased will make your job as executor quite a bit easier. Notifying other beneficiaries will be easier because they’ll likely be members of your family or close friends. Locating the deceased’s assets will be simpler, as you may have already discussed it with the decedent before she died. If the executor was an attorney or an accountant with little exposure to the decedent before appointment, these processes could be slower or more complex.

In the case where you are serving as both executor and sole beneficiary, you can also waive the executor fee, which would come out the estate and potentially lessen the inheritance you and your fellow beneficiaries receive. Since estates are only taxed above a certain threshold and executor fees are taxed as ordinary income, you could avoid losing any of the estate to taxes by waiving the fee.

Potential Downsides

can an executor of a will be a beneficiary

Unfortunately, there’s always the potential for negative consequences when the executor of a will is also a beneficiary. Losing someone close to you is never an easy experience. Having to handle the day-to-day affairs of that person’s estate could potentially drag out the grieving process.

If the executor of a will is one of multiple beneficiaries, that can also be tricky. For instance, if the estate has substantial debts to pay off, the executor may need to pull from the assets that would otherwise go to beneficiaries. This presents an unavoidable conflict of interest. The executor may have to determine how his bequest and the bequests of the other beneficiaries will be affected. This is why it’s important to make sure whomever you name as your executor is someone you trust deeply.

Bottom Line

Despite the potential for conflicts of interest, it’s quite common for beneficiaries to serve as executors. In many ways, it’s more efficient and less complex when that’s the case. The most important thing is to make sure that the executor you name in your will is someone you believe to be competent and trustworthy, regardless of whether you’ll also be leaving them a gift.

Tips for Planning Your Estate

can an executor of a will be a beneficiary

  • If you’re planning your estate or just searching for help with financial planning in general, a financial advisor can be a huge help. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • When doing estate planning, it’s important to look at all of your assets, including any retirement savings. This 401(k) calculator can show you what your account might be worth when you’re ready to enter your golden years.

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Hunter Kuffel, CEPF® Hunter Kuffel is a personal finance writer with expertise in savings, retirement and investing. Hunter is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. He graduated from the University of Notre Dame and currently lives in New York City.
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