When you sit down to write your will, the most consequential decision you’ll make may not be who gets the house or heirlooms, but who will be in charge of carrying out your wishes after you’re gone. In other words, choosing an executor. And though many people name a trusted family member or close friend, others turn to a lawyer or a professional trust company. Both choices come with trade-offs worth understanding before you sign anything.
What Does an Executor Do?
An executor’s job is more demanding than most people realize. They locate and inventory all the deceased person’s money and property, notify creditors and government agencies, file final tax returns, pay outstanding debts, manage any ongoing property or investments during the settlement period, and ultimately distribute what remains to the beneficiaries named in the will. Depending on the size and complexity of the estate, this process can take anywhere from several months to a few years.
Naming a Family Member as Executor
The Potential Benefits
- Familiarity. A family member may be most familiar with your heirs as well as your financial situation. Common family members chosen are spouses, children, and siblings.
- Vested Interest. The family member may also be a beneficiary, with a vested interest in ensuring your estate is administered promptly, efficiently and for the maximum benefit of the beneficiaries.
- Continuity. A family member may also have been your agent under a power of attorney during life, and can continue their duties as executor.
The Potential Drawbacks
- Conflicts. If there are pre-existing conflicts among family members and the executor, these can be exacerbated by the estate process.
- Potential for delays. Events in their personal or work life may take priority over administering your estate, leading to delays.
- Potential for mismanagement. A non-professional may take advantage of access to your assets, or not listen to professional advice, causing loses to the estate.
When a Corporate Executor Makes Sense
A corporate executor, typically a bank trust department or an independent trust company, is worth considering in the following situations:
- Large or complex estates. If your estate includes a business, investment portfolio, real estate holdings in multiple states, or international assets, a corporate executor likely has the infrastructure, specialized staff, and investment experience to manage it properly over what may be a multiyear process.
- No suitable personal candidate. Not everyone has a family member or friend who is financially savvy, geographically close, emotionally prepared to handle the role, and young enough to outlive them. If the candidate pool is thin, a professional institution can be a stable executor.
- Anticipated family conflict. When you know your beneficiaries are likely to disagree, dispute decisions, or pressure an individual executor, a corporate institution provides a professional, impartial third party.
- Minor or special-needs beneficiaries. If your estate will be held in trust for minor children or a beneficiary with special needs over many years, a corporate trustee offers continuity that no individual can guarantee. A trust company won’t die or become incapacitated in year three of a 20-year trust.
- Blended families. When there are children from multiple relationships, a corporate executor removes the temptation of favoritism and reduces the risk of accusations that any one family faction is controlling the process.
The main drawbacks of corporate executors can include:
- fees (often 1 percent to 1.5 percent of assets annually for ongoing trusts),
- one-time settlement fees, and
- a lack of personal familiarity with the family
Some trust companies also have minimum estate sizes, often $500,000 to $1 million or more, before they’ll agree to serve as an executor.
The Bottom Line
Choosing an executor has no universally right answer. A straightforward estate is often best served by a capable, trustworthy family member serving as executor, with a lawyer providing legal support behind the scenes. A complex, high-value, or conflict-prone estate may benefit from professional administration.
What matters most is that the choice is deliberate, informed, and documented clearly in your will. Talk openly with anyone you’re considering naming. And revisit your choice every few years or as your circumstances change. Your executor will be responsible for your final act of generosity to the people you leave behind, so it’s worth choosing an executor carefully.
The experienced estate planning attorneys at Kurre Schneps can help guide you in choosing an executor as part of putting together your comprehensive estate plan. Contact us for a consultation.
