This is the second post in a series on what to think about when determining who you want to designate in your will to serve as executor of your estate.
First of all, you should consider that selecting a beneficiary as your executor might lead to a conflict of interest if there is more than one beneficiary. If the executor seeks compensation for his work, which they are often entitled to, the other beneficiaries might object or raise concerns about the amount sought because they think the executor is trying to get more than his fair share of the estate. Similar suspicions among beneficiaries occur more often than one might expect. And the executor might also be faced with issues requiring her to choose between awarding assets to herself or to another beneficiary. This situation is often best avoided from the beginning by selecting an executor who is not a beneficiary, if possible.
In addition, if your assets include a business, you should be cautious about selecting an executor who is also a partner in your business. Once again, this situation can create conflicts of interest because the executor/business partner may have motivation to continue running the business, while it may be in your beneficiaries’ best interest to sell it.
If your assets are primarily marketable securities, you do not need to be quite so concerned with your executor’s business or financial knowledge. However, if you own a wide range of complex assets, you should select an individual with experience in those types of assets. If you don’t have a friend or family member with the necessary expertise, consider hiring an accountant or similar type of professional to act as your executor for a fee, or hiring a corporate executor.
Finally, some people believe that if it is possible, you should consider selecting someone who knows your beneficiaries and can carry on a healthy working relationship with them. This may help avoid conflicts with the beneficiaries and contentious lawsuits over how the estate should be distributed. Other people believe an outside party with no connection to the beneficiaries may appear to be more impartial and thus, raise fewer concerns among the beneficiaries. In any case, you need to consider these issues when deciding who you will designate as your executor.