Can Banks Serve as Executor?
As you sit down and ponder how to move forward with your estate plan, know you’re doing the right thing. Did you retire recently, or are you making your final preparations? Whatever the case, it’s never too early to begin planning your estate. Part of this plan is deciding who will carry out your wishes when you are unable to. This person is the executor of your estate. In most cases, anybody you wish can serve as your executor. You will want to consider who will do the best job, as they will be responsible for various tasks.
Executors will do things that need a certain level of competence. For example, they must keep track of everything in the estate, collect any assets, and pay debts or liabilities… Among other duties. The executor is also responsible for distributing assets in the will. This means the executor is the one who hands over any property or finance, or rights to your beneficiary. Many choose a family member to serve as an executor, but there are other options. For example, if one has no family and is not comfortable leaving a friend to serve as an executor, some choose the bank.
Why Use a Bank as Executor?
Financial institutions have a great deal of experience managing money. They tend to settle estates in less time than a family member might. As an impartial party, banks are also not prone to influence from beneficiaries. In a situation where a sibling acts as executor and has authority over his brothers and sisters, problems are easy to imagine. Because the bank has no vested interest in any party, you can ensure your wishes are carried out impartially.
Are There Problems with Using a Bank as Executor?
There are certainly considerations to make about who your executor is. A family member will usually waive the compensation that executors are entitled to. In comparison, banks will charge a fee, which can be substantial. Some banks will refuse to serve as your executor if your estate does not provide them with a minimum amount. Most banks will charge 1-5% of your estate’s value as the service fee.
Some banks also want there to be special language in your will. If you suspect this is the case, you’ll want to find the exact language and bring it to your attorney. You will have to modify your will to include it, so if you are starting a new estate plan and intend your bank to execute your will, this is something to learn before finalizing your will. It is also worth noting your bank is not a person. Your will may not be given the personal attention you may want. The person who takes care of your will’s execution may well live on the other side of the country.
Every estate also has a unique situation. Your situation, expectations, and desires deserve personal attention. While working with a bank can be a tempting offer, and many banks offer this service, you should be aware of your intentions and wishes before committing. Speak with one of Dowd Law’s estate planning attorneys to learn more about who may work best as the executor for your estate. Just because a colleague worked with a bank doesn’t mean it will necessarily be the best option for you.
Our experienced estate planning attorneys will weigh the specifics of your needs in a way a bank may not. If a bank does seem like the best option for you, we’ll let you know and help in any area of estate planning you need.