Q

Can an executor of a will be a beneficiary?

A

The executor and beneficiary can be the same person, and they usually are.

When you create a will as part of your estate plan, you'll need to name an executor — also known as a personal representative — to carry out the terms of the will and oversee probate. As a fiduciary of the estate, executors have a responsibility to settle financial matters and protect the decedent's assets before finally distributing them to beneficiaries. Named beneficiaries can serve as executor of an estate, but you may be better off choosing a third party or even an attorney to be your executor in certain circumstances.

Key Takeaways

  • The executor of an estate and beneficiary of a will can be the same person

  • There are benefits and downsides to choosing an executor who is also a beneficiary

  • People with complex or high-value estate assets may want to choose an executor with experience instead of a beneficiary who doesn't have any

  • Any executor who breaches their fiduciary duty, whether or not they are a beneficiary, can be removed and replaced by the court

Who are my beneficiaries?

Beneficiaries of a will are the people who receive your assets after you die, and they can pretty much be whomever you want. You can name a friend, family member, charity, or even a business. (You can even name your child, but they may not be able to use the assets until they've reached the age of the majority.) Make sure your will includes a contingent beneficiary — a back up beneficiary who inherits an asset if the primary beneficiary of a will dies before assets are distributed.

Beneficiaries have certain rights, like the ability to contest a will, or asking the local court to replace an incompetent executor.

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Can an executor of a will be a beneficiary?

It is legal and common practice for a beneficiary to be the executor of a will, like when a surviving spouse or adult child is named to serve as executor and also receives an inheritance from the will. Named executors can always decline their nomination, so the testator (person who writes the will) can also include a backup choice or alternate executor in their will.

Learn more about  how to choose an estate executor and what their responsibilities are.

The testator is not required to let either beneficiaries or executors know that they're named in a will, but it can be useful to tell the executor and talk through your estate plan, so they can be prepared when the time comes to settle your estate.

Executors are compensated for their work, though executors who are also beneficiaries sometimes choose to decline payment since executor fees are taxable as income and inheritances usually aren’t. The testator can also choose to waive the executor fees in their will for an executor who is a beneficiary.

Learn more about how much an executor gets paid

Can an executor who is a beneficiary take everything? 

Executors are legally bound to follow the terms of the will and act in the best interest of the estate. If they go against the will, change the terms of the will, or take more from the estate than what has been spelled out, they are in violation of their duties and can face legal consequences and even be sued.

Related article: Can an executor change a will?

Should I make a beneficiary my executor?

Choosing a beneficiary to act as executor can have its benefits, since the beneficiary would likely be familiar with what’s been left behind. An executor-beneficiary like a surviving spouse may have an easier time locating the decedent's assets and settling financial affairs.

However, executors who are also beneficiaries may find it difficult to carry out their duties while grieving, which could extend how long probate takes and prolong the time it takes for everyone to receive their inheritance. Executors can always consult with professionals, like an estate attorney, to help, but in some cases when the probate process is very involved, it may be better to hire someone with experience from the start. 

You may also consider hiring an unbiased third party to be the executor instead of a beneficiary when you’ve named multiple beneficiaries and want to prevent potential disagreements among them. If you want to have more control over assets and prevent beneficiaries from arguing about their inheritance, you may also want a trust, which is overseen by a trustee. (Learn more about a trustee vs executor.)

In any case it’s best that you write a will that meticulously relays your intentions and what assets people receive without ambiguity so the executor doesn’t have to guess at what you would’ve wanted.

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