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Tuesday, July 25, 2017

Why would someone choose not to tell the beneficiaries who they've appointed as executor?

Have you told your family who you have named as the executor of your will? Have you thought about whether there is a downside to having that information out there? A reader recently sent in a question asking about this situation, and I've shared it with you here:

"Can someone still living, who has a will and selected an executor, divulge the executor's identity ahead of time? (i.e. Ahead of his or her demise?) What might be a reason why the individual would not agree to state to a beneficiary the executor's identity ahead of time?"

A person who has a will, known as a testator, can divulge as much or as little as he or she wants to divulge about private legal matters. Certainly a testator can choose to tell people who has been named as the executor of his or her will, if he or she so wishes, but nobody has the right to be informed.

What might be a reason why a testator would not want to state the identity of the executor? I can think of a couple of really good reasons.

In my view, a person who is named as an executor should always know about the appointment. I urge my clients to talk to their choice of executor to sound them out about taking on the job. I do this because if your executor doesn't know about the appointment, he or she won't realize the need to step up and take charge of matters after you pass away. There is also the chance that he or she will refuse to take on the role. If that's the case, you might end up with no executor. However, I don't see the need to tell the beneficiaries ahead of time who has been named as executor.

Unfortunately, sometimes when a testator makes it known in the family that one person is the named executor, it leads to a mistaken belief on the part of the executor that the executor has some kind of power over the testator. Often the mistake made is that the executor thinks he or she has authority while the parent is still alive, as if he or she was named under a Power of Attorney. I recently had a case in which the executor of a person who is still alive put more than $600,000 of the testator's money in his own name on the basis of the fact that he is the executor. That's completely unlawful of course, but it happened. Other people in the family support this kind of action or simply go along with it because they, too, mistakenly think the job of executor must convey some rights while the testator is still alive.

So perhaps when the testator doesn't want to divulge the name of the executor now, it's because he or she doesn't want someone to start interfering with how the testator is managing financial matters. I've met many parents over the years who are reluctant to sign documents such as wills and Enduring Powers of Attorney because they fear that they are giving their children a license to butt into what the parents are doing. They don't want unsolicited advice and they certainly don't want someone taking away their independence and autonomy.

A testator might also want to keep that information close to the chest because he or she wants to reserve the right to make changes to his or her will in the future without having someone in the family object or complain or question his or her choices. Families really can be very officious and interfering sometimes, even though often such meddling comes from a place of genuine affection.

A common situation that illustrates my point is one in which it has been known for years that Child A is the executor, but one day the parent changes his or her will and appoints Child B. The reaction from Child A (and sometimes other people) is that Child B must have pressured or influenced the parent to make the change. And so begins the suspicion and speculation that turn into a lawsuit after the parent has passed away.

Another reason may just be privacy in general. It really isn't anyone else's business who has been appointed as executor.

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