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

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.

Read More: An Executor's Duties to a Beneficiary

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.


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.

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