Legal practice often shows that numerous conflicts among heirs could have been avoided by appointing an executor. By designating an executor in their will, a testator can precisely control the inheritance process and prevent disputes.
Whether the advantages or disadvantages of appointing an executor outweigh each other in a specific case depends on the individual situation and should therefore be carefully considered. The fundamental advantages and disadvantages can be summarized as follows:
1. Advantages of executing a will
A significant advantage is the ability to enforce one’s wishes even after death. For example, the testator can postpone the division of their inheritance for up to 30 years and entrust the oversight to an executor. Furthermore, the execution of a will ensures the fulfillment of legacies and conditions, so that beneficiaries are not dependent on the goodwill of the heirs or have to take legal action against them to enforce their claims.
Within an estate that needs to be dissolved, a neutral executor facilitates an orderly settlement of the inheritance, which they carry out independently, without the involvement of the heirs. “So even if there are several heirs or some are located abroad, executorship significantly simplifies estate administration,” explains lawyer István Cocron.
Appointing an executor can also protect the estate from heirs who are inexperienced in business or even unreliable. In such cases, the executor manages the inheritance and, if applicable, the resulting income on behalf of the heirs. This is particularly helpful in business succession situations, especially if the intended successor initially requires a transition period, for example, to complete their education.
Appointing an executor can also prevent court intervention, such as by the guardianship court in cases involving minor heirs, as well as lengthy approval processes for certain estate dispositions. An executor can also protect the beneficiary from creditors by restricting their access to the inheritance.
2. Disadvantages of executing a will
However, executing a will also has its downsides. It is customary for the executor to charge a fee, which can range from 1% to 3% of the net estate. Furthermore, if the executorship is intended to be long-term, the executor’s extensive powers can significantly restrict the heirs.
Because the executor manages the estate independently and can even incur new debts, the heirs are severely restricted in their ability to manage and dispose of the estate. Heirs receive only an inventory of the estate and an annual statement of accounts. While they have a right to proper administration, this term is legally vague and difficult to prove if there are doubts about proper management.
Furthermore, the executor is largely exempt from judicial oversight; in cases of mismanagement, heirs are reliant on claims for damages and can only take action against the executor under civil law. In some circumstances, prolonged executorship can be so detrimental to the heirs that it may be advisable to disclaim the inheritance and claim their statutory share instead.
Furthermore, the office of executor only comes into effect upon acceptance. “Until acceptance, weeks or months can pass without an available person, as the heirs are not permitted to act during this time. However, this can be circumvented by granting a power of attorney,” explains attorney Cocron.
