Choosing a bank to serve as executor for your estate has its advantages and disadvantages. In most common estates, people will choose a trustworthy, organized person to serve as executor of their estate. However, this is not always the case. In some common estates, people will choose a bank to serve as executor for the following reasons:

• There are no family members in the area that have the traits to serve as executor as described in the article Choosing the Right Executor to Administer Your Estate.

• To keep family harmony by avoiding disputes among family.

• Allow family members to grieve without the stress of administering an estate.

Although these are all valid reasons for choosing a bank as executor, you must give careful consideration to the advantages and disadvantages of such a choice. Without proper consideration, you may make a choice that could prove costly to your estate.

The Advantages of Choosing a Bank as Executor

If you are considering a bank to serve as executor for your estate, there are some advantages. These advantages include the following:

• Some banks have trust departments that will provide professional estate management.

• In some instances, banks have in-house professionals to file taxes and handle legal matters. This relieves the executor from the burden of hiring professionals when needed.

• By selecting a bank, you will relieve survivors from the stress of administering an estate while grieving your loss.

• The bank will manage the estate away from family members to preserve family harmony.    

These advantages are valid and extremely helpful to the survivors. Furthermore, some banks will manage common estates in addition to managing larger, wealthier estates. Accordingly, some banks offer a viable solution to serve as executor for those with common estates.

The Disadvantages of Choosing a Bank as Executor

Along with the advantages of choosing a bank to serve as executor, there are also disadvantages. Some of these disadvantages transpire because of bank fees and estate size. These disadvantages include the following:

• Banks charge fees for professional estate management services that can be excessive.

• There are banks that look at estate size before they agree to manage the estate.

• Banks may merge and move out-of-state.

• Some banks outsource services to professionals such as lawyers and CPA’s. This results in higher fees as the bank passes on the cost to the client.

As with the advantages, these disadvantages are real and can be costly to the estate. Additionally, some banks will refuse clients with common estates. Consequently, before choosing a bank to serve as your executor, you must find a bank that will handle your estate size using a reasonable fee structure.

Other Considerations in Choosing a Bank as Executor

Before choosing a bank as your executor, you must consider the complexity of your estate. If you have a well-planned common estate, there is no need to pay a high premium to manage your estate. Conversely, if your estate has complications, perhaps it would be best if professionals handle the estate.

Furthermore, if you decide to choose a bank to serve as your executor, you need to determine if the fee structure is fair. Basically, you must negotiate with the bank using the following factors:

• The size of the estate and the complexity.

• Estimate the number of hours of work required.

• Level of expertise of those working on the estate.

If after the negotiation you think the fees are satisfactory, then the bank becomes a viable option for you. Otherwise, naming a trustworthy, organized individual as your executor would be best for your estate.

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