In estate planning, roles like the executor and beneficiary carry different responsibilities. The executor manages and distributes the deceased’s assets, and the beneficiary receives estate assets at the end of the estate settlement process.
But can the same person be named as both executor and beneficiary?
The short answer? Yes, the same person can be both an executor and a beneficiary of an estate, and it’s quite common.
In this article, we’ll explore executor responsibilities, beneficiary rights, and the pros and cons of naming the same person as executor and beneficiary of your estate.
Understanding the roles of executors and beneficiaries
Executor responsibilities
An executor is responsible for administering the deceased’s estate. Your estate includes all your assets, liabilities, and debts, and is created when you pass away. An executor has no power to act while you’re still alive.
Once you pass away, your appointed executor reads your will (if you have one) and fulfills their duty to settle your estate. This includes tasks like managing your funeral and burial wishes, identifying and securing assets, settling debts, dealing with online accounts and digital assets, distributing assets to beneficiaries, and filing final tax returns.
Your executor may also manage the probate process if probate is necessary.
If you don’t have a will or haven’t appointed an executor, then your estate will need to go through probate, and an estate administrator will be appointed by the courts to manage your estate.
Executors must prioritize the best interests of your estate and beneficiaries. They can be personally liable for managing your estate properly.
Learn more about an executor’s duties and responsibilities →
Beneficiary rights
A beneficiary is named in your will to inherit your assets or property.
Beneficiaries hold specific rights, including the right to transparency about the executor’s actions and how they’re handling the estate. They also have the right to asset distribution according to the will's terms, meaning the way assets are distributed cannot be changed or manipulated.
If an executor does not follow the terms of the will or acts against the beneficiaries' best interests, the beneficiaries have the legal right to request a formal accounting of their work. Beneficiaries can potentially remove executors from their position as executors if they’re found to be abusing their power.
Can the executor of a will also be a beneficiary?
Yes, Canadian law allows an executor to be the sole beneficiary of an estate or one of many beneficiaries.
Many people appoint their family members as both beneficiaries and executors in their will. In fact, one of the most common ways to structure your will is to appoint your spouse or partner as both executor of your estate and your sole beneficiary.
This gives you peace of mind, knowing your estate will be handled by someone you trust.
However, appointing a beneficiary as an executor may introduce potential conflicts of interest. For example, the executor might prioritize their inheritance over other beneficiaries or face disagreements with family members.
This is considered a breach of the executor’s legal obligation to act with prudence and impartiality and is one of the things an executor cannot do.
In Canada, any evidence of prioritizing personal inheritance over other beneficiaries can result in legal action against the executor, including personal financial liability. Courts strictly uphold the fiduciary standard, especially when executors also benefit from the estate.
Executors are required to communicate with beneficiaries about their actions to a reasonable degree. They’re also encouraged to seek professional help with their duties if needed.
What happens when an executor is also a beneficiary?
When an executor is also a beneficiary, they must act responsibly. They are still bound by fiduciary duties, meaning they must act in the best interest of the estate and other beneficiaries, even if they’re also entitled to receive an inheritance from the estate.
Advantages of having an executor who is a beneficiary
There are advantages to having an executor who is also a beneficiary, including potentially waived executor fees, more trust, and a better understanding of the estate;
Disadvantages of an executor also being a beneficiary
The potential downsides to having a beneficiary as an executor can include the need for impartiality, the potential for family disputes, and the stress being an executor can cause.
Willful makes it easy to appoint executors, beneficiaries, and backups for both!
Best practices for assigning an executor of a will
Before assigning an executor, consider the following:
- Choose someone with finance experience: Choosing an executor with financial expertise or legal knowledge can help make settling your estate easier and faster, especially if you have a complex estate.
- Appoint a co-executor: Having co-executors may help balance the stress of settling the estate, ensuring executors hold each other accountable and impartial. But be careful. Multiple executors can be difficult logistically, as all executors would be required to sign paperwork together every time and collectively agree on all estate settlement decisions. The only remedy if they don't agree would be court (unless the will states otherwise).
- Choose a good communicator: Being an executor means communicating with multiple groups of people, including the deceased's loved ones, beneficiaries, creditors, government officials, bank representatives, and more. Your executor must be able to clearly communicate in order to manage their duties and avoid misunderstandings.
- Define expectations early: Talk to your chosen executor about their responsibilities. They should understand what the role entails and what’s expected of them before you add them to your will. Discussing the estate settlement process with your beneficiaries can also keep their expectations realistic and help prevent misunderstandings later on.
- Consult a professional: If you can’t think of anyone to take on the role of executor, you can appoint a professional executor or a lawyer in this role. While this person may not be familiar with your estate, they’ll be more experienced and can provide professional impartiality.
Read more about how to choose an executor →
The importance of executors and beneficiaries
In Canada, it’s entirely possible—and often beneficial—to have an executor who is also a beneficiary of your estate.
Understanding the legal considerations, weighing the advantages and disadvantages, and following what works for your situation can help you appoint an executor you can trust to handle your estate and look after your loved ones.
Create your legal will easily with Willful today.
