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Can an Executor of a Will Be a Beneficiary?

Byline profile imageWritten by Hunter Kuffel, CEPF®
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Byline profile imageEdited by Arturo Conde, CEPF®
Byline profile imageReviewed by Brandon Renfro, CFP®, RICP, EA
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Serving as the executor of a will can take more time and work than many people expect. The executor must handle debts, close accounts and make sure assets go to the right beneficiaries. Executors can be professionals, like attorneys or accountants, or close family members. It’s also common for an executor to be one of the beneficiaries named in the will.

If you need to create an estate plan, a financial advisor can help you organize your assets and coordinate your plan with your legal and tax professionals.

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

When an executor is also a beneficiary, managing the estate can add emotional strain and make the grieving process more difficult.

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.

How Courts Handle Disputes With an Executor as Beneficiary

When the executor of a will is also one of its beneficiaries, questions of fairness can arise among the other heirs. Probate courts are aware of this potential conflict of interest and generally keep close oversight of the executor’s actions. Executors are required to act under a fiduciary duty, which means they must put the interests of the estate and all beneficiaries ahead of their own. To help enforce this, courts typically require the executor to file detailed accountings of the estate’s assets, debts, distributions and expenses. These records are open to review by the court and, in many cases, the other beneficiaries.

If beneficiaries believe that the executor has mishandled estate assets, paid themselves improperly or otherwise favored their own interests, they can file objections with the probate court. The court can then investigate and, if necessary, order corrective actions such as repaying misused funds. In serious cases, the judge has the authority to remove the executor altogether and appoint a replacement.

Courts also require certain decisions, like selling property or distributing assets in non-cash form, to be handled transparently. Often, executors must obtain court approval before carrying out these actions, which provides an additional safeguard for all parties involved. These checks and balances help ensure that even if an executor is also a beneficiary, the estate is still administered in a way that is fair and consistent with the law.

For beneficiaries, it’s important to remember that probate courts provide avenues of recourse if they suspect mismanagement. For executors, being both an heir and a fiduciary means carefully documenting each step and remaining mindful that they are acting not just for themselves but for all beneficiaries of the estate.

Bottom Line

It’s common for a beneficiary to serve as executor, but the key is choosing someone competent and trustworthy to manage your estate.

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

  • 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 financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel 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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