The executor of a will is chosen by the testator at the time of the making of the will. Most people like to appoint a family member such as a surviving spouse or child to handle their estate after their death. Can an executor of a will be a beneficiary? Yes. It is not an unusual arrangement. In fact, the majority of executors are beneficiaries!
When there is a large estate with assets that need management, the testator sometimes appoints a neutral a third party such as an attorney or a financial institution to act as a co-executor. The decedent may also choose to name a sole beneficiary and another unrelated family member who may have more time, or who is better qualified and has more experience in handling business and financial matters as co-executors to share tasks or certain responsibilities. All of those are valid arrangements.
When an executor of a will is also a beneficiary, they may erroneously think that they can take money out of the estate before giving the other beneficiaries their share. The executor might reason, don’t some of the money in the estate account also belong to him? For example, a lady left her inheritance to her four children, and one of the children is an executor. Can the executor-child withdraw cash from the estate and say that he is just withdrawing his own cash? The answer to that is absolutely not. Even though the executor is one of the beneficiaries of the will, at the end of the day the estate is not his. The estate belongs to all the beneficiaries. So if an executor withdraws cash from the estate account, he is considered by the law to be taking everyone’s money, not just his own. As an example, if he withdraws four thousand dollars in cash, he is not considered to be taking four thousand dollars of his own cash from the estate account. Rather, he is considered to be stealing a thousand dollars from each of his siblings. If he withdraws a penny, most of that penny belongs to the other beneficiaries.
To avoid allegations of taking money from others beneficiaries, an executor should ask other beneficiaries to sign a waiver and release before distributing any funds. Can an executor of a will be a beneficiary? Yes. But that does not mean that they should not be careful. An executor who is a beneficiary is just as responsible as a non-beneficiary to follow the law and their fiduciary duty to the other beneficiaries. To help with the responsibilities of the estate, it is recommended that an executor-beneficiary obtain the services of an experienced estate attorney.
It is recommended that an executor seek the legal representation of a knowledgeable New York probate and estate attorney in order to be more successful in getting the executor removed and having the beneficiary appointed. The attorney can also be of great assistance in helping the executor perform the required tasks, such as:
• Locating assets of the decedent
• Making accountings
• Approving and denying creditor’s claims
• Managing financial accounts and real estate
• Selling real estate
• Meeting court deadlines and estate tax return deadlines
• Handing and resolving disputes
• Distributing assets and winding up and closing the estate
Managing an estate takes a lot of time. Many executors of a will who are beneficiaries are not experienced at handling business, financial or legal matters. A New York probate and estate lawyer to help them with the administration and management of the estate. If you wish to speak to a New York estate attorney, call the Law Offices of Albert Goodwin at 212-233-1233 or 718-509-9774.