When writing your will, one of the questions you may have to consider is if you can appoint a beneficiary as the executor of the will. To answer this question, you will have to understand who a beneficiary is, who an executor is, and what their responsibilities are.
When you know this, you will be able to select them well and minimize any chances of disputes arising between beneficiaries or between the beneficiaries and the executor. Keep reading and we will help you understand these terms in addition to explaining to you if you can choose a beneficiary to execute your will.
Who is a Beneficiary?
A beneficiary is a person or people you nominate to get a part or all of your estate after your death. The beneficiary of your will could be your spouse, children, relatives, a charity, a friend, or any other person or group to whom you decide to bequeath your wealth. You can leave a specific item, money, or a percentage of your wealth to any of your beneficiaries. If you have more than one beneficiary, you should show in the will the exact items or percentages of the estate that each should get to minimize disputes among them.
Who is an Executor?
The executor of your will is the person you nominate to act on your behalf and administer your estate when you pass away. This person will be responsible for distributing your estate to the beneficiaries that you have named in your will and to carry out other administrative duties that are related to the estate. Such duties could include paying debts, taxes, and other obligations that your estate owes third parties.
You can appoint one or two people to be your executor. When you have more than one executor, you can choose to let them act collectively; such that they take equal responsibility and make decisions collectively. You can also choose one as the alternative, such that in case the executor is not able to carry out this duty, the alternative executor can take over the responsibility.
Duties of an Executor
The main responsibilities of an executor include the following:
- Obtaining a death certificate
- Getting the will and sharing its contents with your beneficiaries
- Corresponding with all the institutions and individuals that are involved in your estate. These could be suppliers, banks, service providers, land registry, or companies.
- Valuing the estate
- Paying all the debts that your estate owes
- Calculating and paying taxes that are due
- Distributing your wealth to your nominated beneficiaries
- Transferring or selling your investments or properties
- Defending any challenges that may arise from your will
Who Can be an Executor?
The person you choose as your executor has to be an adult of sound mind. You can appoint a professional such as an accountant, a lawyer, a financial advisor, or a trustee company to execute your will. You can also name a friend or a relative to execute your will.
Challenges Faced By Executors
Being an executor is very involving. You need to devote time and take time to consider the decisions that you make. Remember that as an executor, you are acting on behalf of the estate owner who nominated you, and if you make any mistakes, such as failing to pay debts and taxes, you will be held responsible.
Here are some of the challenges that you should expect to face if you have been nominated as an executor of a will.
Opposition from Beneficiaries
Some beneficiaries may oppose you because they want to pick items left by the deceased person without following the wishes of the estate owner. They may perceive you as an intruder or disagree with the contents of the will.
To minimize the dispute between you and the beneficiaries, you should secure the estate as soon as the owner passes away and inform the beneficiaries about the will and what the estate owner wished for his wealth.
Being an executor is demanding. You will need to devote time for you to carry out this responsibility effectively. It will be easier if you are organized as you can draw a schedule and stick to it. But if it is too demanding for you, you can outsource some responsibilities to professionals. An accountant or a lawyer can help you, but you also have to know that that comes at a cost.
Personal Liability Exposure
Beneficiaries may put pressure on you to distribute their shares of the estate. However, if you do so before settling debts and tax obligations and you realize what is left is not able to meet these obligations, then you carry the liability.
It will be up to you to find means and ways of settling these obligations since they are deemed transferred from the estate owner to the executor who is acting on his behalf.
Keep a record of postage fees, telephone call costs, travel costs and any other costs you incur as you carry out your duties as an executor. Disclose these costs to the beneficiaries so that they can know you are not using the money for personal gains.
Disagreements with Co-Executors
In situations where you are more than one executor, you may disagree with your co-executors. If you are unable to resolve your disagreements and they are hindering you from carrying out the responsibility of executing the will, consider allowing only one executor to serve. If this is still not possible, then all of you should step aside and assign the responsibility to a bank or another executor.
Can an Executor be a Beneficiary?
An executor can be a beneficiary of a will. This is common practice, where a spouse appoints the wife or husband as the executor of an estate that he or she will be a beneficiary. There are also some parents who appoint one or all of their adult children as co-executors of their estates.
When a beneficiary is appointed an executor, the process may be faster as he or she will have more knowledge about the estate and the beneficiaries. It will be easier to notify the other beneficiaries who are likely to be close to family members and friends. Additionally, contacting companies, banks, and service providers may be easier since they are more likely to be familiar to you.
For you to have been appointed as the executor, you must have had a close bond with the deceased person. You, therefore, understand his or her estate and will take you less time to trace their properties. Moreover, the other beneficiaries mat trust you more, and you can decide to waive for them the execution commission.
When you are a beneficiary, it means you had a close relationship with the deceased person. You may find it difficult to step into the shoes of the person you are mourning. And if you do so, then you may have to delay your mourning and healing process, which may have emotional repercussions on you later in life.
The other beneficiaries may not understand some of the decisions that you will need to make. For instance, if the estate has a huge debt, you may decide to sell some assets to clear the debt. If this asset had been assigned to a specific beneficiary, this will bring a dispute between you.
It is clear, therefore, that you have to choose your executor carefully. You worked hard to put together your estate. Appoint someone you fully trust to administer it when you are not there.
The Rights of an Executor
As an executor of a will, you have your rights regardless of whether you are a beneficiary or not. The first right is to accept or decline the appointment. If you know you will have challenges that will hinder you from executing the will effectively, you can decline the appointment and allow the estate owner to name another executor.
You also have a right to resign even after you have executed the will for some time. In this case, the beneficiaries will have to name a new executor of the will. They may choose from among themselves, or hire the services of a professional. And if you are the sole beneficiary and the executor, you can appoint an executor of your choice.
Whatever expenses you incur in the course of administering the will, the estate should reimburse you. You should not execute the will at your own cost, even though sometime you may have to spend out of your pocket. If you have records, you should claim such money from the estate.