An executor of an estate plays a vital role in estate planning and administration. The executor must make sure that the deceased person’s wishes are carried out meticulously and that all the estate assets are distributed appropriately.

However, sometimes, the executor of an estate can also be named a beneficiary in a will. While this is not uncommon, this dual role is subject to specific legal considerations and potential conflicts of interest that must be addressed carefully.

Can an Executor of a Will Be a Beneficiary?

In Alberta, an executor of an estate is legally allowed also to be a beneficiary. This means that the person responsible for managing and distributing the estate can stand to inherit assets or property as outlined in the deceased’s will.

In many cases, individuals choose a close family member or trusted friend as the executor of their will, and it is not uncommon for these individuals to be named as beneficiaries as well. While this is legally allowed, there are both benefits and drawbacks to such an arrangement.

Benefits of Being Both Executor and Beneficiary of a Will

There are several benefits of being both the executor and a beneficiary of a will.

Familiarity with the Deceased’s Wishes

When an executor is also a beneficiary, they often possess a profound understanding of the deceased person’s intentions and wishes, providing several advantages. This familiarity enables them to carry out the provisions of the will with precision, understanding specific bequests and distributions, which reduces the likelihood of errors.

In cases where wills contain ambiguous language or unclear instructions, a beneficiary-executor can often discern the deceased’s true intentions, potentially avoiding disputes among beneficiaries. Familiarity with the deceased’s wishes can also lead to more efficient decision-making during the estate administration process, resulting in a quicker distribution of assets and a smoother overall process.

Cost-Efficiency

The cost of hiring a professional executor can be a substantial financial burden on the estate, making the involvement of a beneficiary-executor cost-effective. When an executor chooses to reduce or waive their fees, it translates to a significant reduction in the estate’s overall expenses, which is particularly beneficial for estates with limited assets, as it preserves a higher portion of the estate’s value for distribution to beneficiaries.

By minimizing or forgoing executor fees, the beneficiary-executor can also retain more of their own inheritance, offering financial benefits, especially in cases where the executor has a close family relationship with the deceased or is dependent on the inheritance.

Emotional Connection

The beneficiary-executor’s emotional connection with the deceased serves as a strong motivator to carry out their duties with the utmost care and diligence. They often feel a personal obligation to honor the deceased’s wishes and preserve their legacy.

Beneficiary-executors also tend to be personally invested in the estate’s well-being, often taking extra steps to maintain and enhance the estate’s assets, knowing that these assets will directly benefit them. This emotional connection further drives them to fulfill the deceased’s wishes meticulously, making them diligent and detail-oriented in their role as executors.

Knowledge of the Deceased’s Affairs

In many cases, an executor who is also a beneficiary possesses a deeper understanding of the deceased’s financial affairs and personal matters. This prior knowledge expedites the process of gathering essential financial and personal information, including account details, investment portfolios, and insurance policies.

Beneficiary-executors typically excel in identifying the deceased’s assets and liabilities, resulting in a faster and more accurate assessment of the estate’s overall financial situation. Their familiarity reduces the risk of overlooking vital financial or legal details, minimizing the chances of unintentional omissions during estate administration.

Disadvantages of Being Both Executor and Beneficiary of a Will

Being both the executor and a beneficiary of a will can have certain drawbacks.

Conflict of Interest

A significant concern when an executor is also a beneficiary is the potential for a conflict of interest, which can manifest in various ways. The beneficiary-executor may be tempted to favor their own interests or the interests of a specific beneficiary, potentially resulting in uneven treatment among the beneficiaries.

Such conflicts of interest can lead to biased decision-making in critical matters such as asset valuation, asset distribution, and the payment of debts, potentially misaligning with the deceased’s true intentions. These decisions may be perceived as biased by other beneficiaries, leading to disputes and the possibility of legal actions.

Consent of Other Beneficiaries

When an executor who is also a beneficiary makes significant decisions, it is often advisable to seek the consent of other beneficiaries. However, this process can be complex and contentious as beneficiaries may not readily agree to decisions made by the beneficiary-executor. This can lead to disputes and delays in the estate administration process.

Communicating decisions and achieving consensus among all beneficiaries can be a time-consuming and challenging task, which may, in turn, lead to friction among family members or beneficiaries. In cases where consent cannot be obtained, it may escalate to legal actions initiated by dissatisfied beneficiaries, further extending the duration of the estate settlement process.

Court Approval

In certain situations, seeking court approval may be necessary to ensure that the executor is acting in the best interests of the estate. This process can be complex with various considerations.

In cases where the estate’s provisions are complex, or there is a high likelihood of disputes among beneficiaries, approval by the probate court may be sought to validate the executor’s actions. However, this path can prolong the time required for estate settlement and potentially result in additional legal costs.

Seeking court approval also exposes the executor’s actions to heightened scrutiny, leading to a more thorough review by the court and the possibility of additional challenges from beneficiaries.

Strain on Relationships

Serving as both an executor and a beneficiary can strain relationships within the family or among beneficiaries. Even when the beneficiary-executor acts with the utmost fairness, their actions may be perceived as favoritism or self-interest by other beneficiaries, potentially leading to strained relationships.

Conflicts stemming from the dual role of executor and beneficiary can result in enduring discord and strained family ties, and these tensions may persist beyond the estate settlement process.

Increased Scrutiny

When an executor is also a beneficiary, their actions may encounter heightened scrutiny from other interested parties, particularly beneficiaries who are not also executors, which can introduce additional challenges during the estate administration. These beneficiaries may closely monitor the actions of the beneficiary-executor, diligently searching for any signs of impropriety or bias.

This elevated scrutiny may escalate to legal challenges and disputes initiated by beneficiaries who are dissatisfied with the executor’s decisions, even in cases where the executor is acting impartially, thus adding an extra layer of complexity to the estate administration process.

Serving as both a beneficiary and an executor can be complex. An experienced wills and estates lawyer can help you navigate the legal and administrative aspects of your role as a will executor. Get in touch with DLegal today. We have intimate knowledge of the probate process of estate property and can assist you to ensure that you fulfill all your legal duties as an executor and beneficiary.