What Happens When the Bank Is the Executor of Your Will?

By Marilyn Lindblad

Making a will can be a stressful, emotional experience. The individual who makes the will, known as the testator, has to determine what happens to her property after she dies. The testator typically also appoints an executor to manage her estate. Some testators appoint a family member as executor, while others appoint an institution such as a bank.

Executor's Duties

An executor is responsible for carrying out a deceased person's wishes for distributing her property and possessions. The executor oversees the process of identifying the deceased's assets, managing the deceased's affairs, locating beneficiaries named in the will, paying the deceased's debts and fulfilling other duties that may arise during the course of settling the estate. The more complicated an estate is, the greater the burden on the executor.

Bank as Executor

There are several reasons why it may be advisable to name a bank as the executor of an estate. Banks have experience administering estates. They are in the business of managing assets that their customers entrust to them, and their employees stay current on developments in tax law and estate law. Banks have checks and balances in place to ensure that an estate's assets are safeguarded against mismanagement and theft. Finally, a bank acts impartially, unaffected by the behavior of beneficiaries and family members who may try to influence the executor.

Protect your loved ones. Start My Estate Plan


Some individuals may hesitate to name a bank as executor because of the expense involved. A bank charges fees for acting as executor, whereas a family member may serve at little or no charge. Some states establish a maximum statutory fee that an executor can charge, calculated as a percentage of the value of the estate. In other states, an executor may charge an estate a percentage, a flat fee or an hourly fee based on the work performed. At the time of publication, the industry standard rate banks charge is 3 percent of the value of the estate. Appointing a bank as executor could save money for an estate in the long run. An experienced executor, such as a bank, may be able to settle the estate faster and more efficiently than an amateur, ultimately leaving more assets for heirs and beneficiaries.

Naming the Executor

An individual whose estate is complex or extremely valuable should consider consulting an estate-planning attorney to draw up a will and select an executor. An individual whose estate is relatively simple may use an online document preparation site, such as LegalZoom, to make a will. A bank is not required to accept an appointment as executor of a will; some banks decline the opportunity to administer small estates. If the testator decides to name a bank as executor, she should meet with the banker beforehand to let the bank know what her plans are and to ensure the bank will accept the appointment. At that time, the testator can find out what fee the bank will charge to act as executor.

Protect your loved ones. Start My Estate Plan
Can the Executor of an Estate Be Held Responsible if the House Goes Into Foreclosure?


Related articles

Procedure for Appointing an Executor of a Will

The testator, or person drafting the will, appoints an executor to handle the distribution of the estate. If the will does not name an executor, the court appoints an administrator. Many people consider the role of executor to be an honorary appointment. However, an executor incurs serious responsibilities in administering the affairs for the estate. While the final decision rests with the testator, following certain guidelines can minimize misunderstandings and may prevent serious legal difficulties down the line.

What Can an Executor Legally Charge the Estate for in Texas?

When a person dies in Texas, some or all of the estate's assets will go through a court probate process before being passed down to the decedent's beneficiaries. In most cases, the decedent names a trustworthy person in his will to administer the estate. This person, called the executor, acts as a representative of the estate, guiding it through the probate process. This can be a time-consuming and expensive process for the executor, so Texas allows compensation for performing executor duties.

What Is the Statutory Amount to Pay an Estate Executor in Illinois?

When you die, an executor must collect your remaining assets, pay your creditors, and distribute your property according to a will -- or if you do not leave a will, according to state law. Illinois law provides for "reasonable" compensation for the work your executor must perform in administering your estate. The probate court has the ultimate say in whether a fee is reasonable. It will consider the hours involved, the size of the estate, and any unique circumstances.

LegalZoom. Legal help is here. Start Here. Wills. Trusts. Attorney help. Wills & Trusts

Related articles

What Actions Must an Executor Take Upon a Death in Utah?

Settling the affairs of a deceased person, known as a decedent, may include only a few basic tasks for a small estate, ...

Responsibilities of an Estate Executor in California

Probate is a court process that results in the distribution of the property of the deceased, known as the decedent, to ...

Trouble With an Executor

Just because your loved one trusted an individual enough to name her as executor of his will, doesn’t automatically ...

Who Pays Probate: the Estate or a Beneficiary?

The beneficiaries, or those named in a decedent's will, are often anxious to receive their inheritances, but an estate ...

Browse by category
Ready to Begin? GET STARTED