Should Your Beneficiary Serve as Your Executor or Trustee?

For most people, choosing an executor or trustee means choosing someone close to them – a family member or a friend. However, this often means their executor or trustee is also a beneficiary. But, will choosing a beneficiary create a conflict of interest?

The short answer is, the best way to avoid a conflict is to be as specific as possible in your instructions to your executor and beneficiaries.

An executor or trustee has a legal duty to manage the property and assets in the decedent’s estate for the benefit of the trust or estate beneficiaries. This means that while the executor/trustee should be compassionate, they must also act in an equal and unemotional manner toward every beneficiary.

A beneficiary, on the other hand, is often emotionally involved. Even those beneficiaries who are not concerned with the monetary aspect of their inheritance will likely be emotionally invested in the heirlooms of the estate. Sadly, many family feuds are sparked when siblings can’t agree on who gets sentimental items such as the family silver or great grandma’s engagement ring.

That is why adding as much clarity as possible to the terms of your estate will decrease the chances that the executor will be tempted to take advantage of their position. However, you may also want to consider naming a disinterested party as a trust advisor or co-executor to provide checks and balances throughout the administration process.

If you are a beneficiary who is also serving as an executor or trustee there are a few things you can do to ensure you keep your roles separate.

You can:

•  Contract a probate or estate planning attorney to mediate or oversee the process.

•  Involve an impartial appraiser if real property is involved.

•  Step down and hand the role over to a qualified and disinterested party if all else fails.

If you are concerned about naming an executor or trustee that is also beneficiary, or facing difficulty in serving in the role yourself, we can help you navigate the process in a fair and compassionate manner. At McKelvey Law Offices, we specialize in considering a client’s family dynamic while drafting personalized estate plans. If you are unsure how to proceed in your planning, especially while factoring in immediate family, do not hesitate to schedule a consultation. McKelvey Law Offices is in Salix, Pennsylvania, right outside of Johnstown. Call us at 814-262-8058.