Who will be chosen as an executor, or as it’s called in Arizona, a “personal representative,” is among the most important decisions to be made in estate planning. The person designated as the personal representative will be the one to enforce the deceased person’s last will and testament provisions. Can an executor of a will be a beneficiary? The short answer is yes. It is very common for a beneficiary to be the personal representative.
Can an Executor of a Will be a Beneficiary in Arizona?
Arizona law allows an executor to be a beneficiary also. More often than not, that beneficiary/personal representative is a family member or very close friend of the deceased. Often, the beneficiary was also the person who handled the deceased’s financial affairs in their last days, through a power of attorney.
Comparing an Executor, a Beneficiary, and an Interested Person
As regards handling an estate after someone has died, it can be helpful to understand the legal definition of an executor (aka personal representative) as compared to that of a beneficiary and an interested person.
What is a personal representative?
The executor or personal representative of an estate is the person who ensures that the deceased’s wishes are fulfilled. The role involves tremendous responsibility. It can be time-consuming and emotionally taxing to fulfill the duties of an executor.
The duties of a personal representative include paying off the deceased’s debts out of the deceased’s assets. There is also a fiduciary duty that can make the executor liable if the executor does not do the job properly and legally.
The precise duties of an executor depend on the estate size, complexities that may exist in the will and the types of assets involved, but the following are general duties of an executor:
- Locate all of the deceased’s assets.
- Pay creditors and pay off debts using the deceased’s assets.
- Protect the assets of the deceased until they are distributed to the named beneficiaries.
- Determine whether law dictates that the will must go to probate.
- Locate and contact everyone the deceased named in the will.
- Notify banks and credit card companies that accounts must be canceled, as part of wrapping up the deceased’s financial affairs.
- Open a bank account for the estate.
- Continue to pay ongoing bills such as the mortgage and insurance, using the deceased’s assets.
- Ensure that beneficiaries receive property from the estate according to the deceased’s wishes.
What is a Beneficiary?
A beneficiary, sometimes called an heir, of an inheritance or will is a person who receives a benefit, usually a financial benefit, when another person has died. Examples of the benefits a beneficiary might receive follow:
- Real estate
- Personal belongings
- An insurance policy or annuity
- Accounts at financial institutions
- A pension
- Payment from a retirement account
Who is an Interested Person?
An interested person is someone who is impacted, financially, by a person’s death. It can be:
- A beneficiary
- The Personal Representative
- The spouse
- The children
- A charity
- Creditors
Advantages of Having a Beneficiary as Executor
Is it a good idea having a beneficiary serve as Personal Representative? Generally, yes. The beneficiary may already be familiar with the deceased’s assets and can shorten the time needed to get affairs in order. A family member who is both may be able to handle any family squabbles more effectively. A beneficiary may be more motivated to take care of the affairs sooner rather than later so as to get inheritances distributed faster.
Disadvantages of Having a Beneficiary as Executor
A potential conflict of interest is the fundamental disadvantage of nominating an estate personal representative who is also a beneficiary. Whether this becomes an issue may not be apparent until someone dies.
Contact Paula Hannah, Estate Planning Attorney
Get all of your questions about estate planning by Paula Hannah. Having a lawyer explain the estate planning process in simple English and walk you through the steps will make everything easier during a very difficult and challenging time. Schedule an appointment with the Law Offices of Paula Hannah, PLC.