What it means
When someone dies, their assets do not transfer automatically to whoever is named in the will. Someone has to obtain legal authority, take control of the estate, settle its obligations and hand over the remainder, and that someone is the executor.
For business owners, the executor question is not a private family matter. If a founder owns 60% of a trading company, the executor temporarily controls that stake, which means an unprepared or slow executor can freeze decision-making at exactly the moment the business is most fragile.
The work follows a predictable sequence: locate the will, obtain the court grant that confirms authority, inventory the assets and liabilities, pay creditors and taxes, then distribute. In a straightforward estate this takes six to twelve months, and in one with a private business, foreign property or a contested claim it can take years.
Executors owe a fiduciary duty, meaning they must act in the interests of the estate and its beneficiaries rather than their own. They can be held personally liable for losses caused by carelessness, such as distributing assets before settling a tax bill, which is why professional executors insist on formal clearances before paying anyone.
Most jurisdictions allow an executor to be paid, either a fee set out in the will or a commission based on a percentage of the estate. Family members often waive the fee, while banks and trust companies charge scaled rates that are worth comparing before appointing one.
In practice
Real-world examples.
Example
A woman appoints her adult daughter as executor and her solicitor as a co-executor. The daughter handles the personal decisions and the solicitor handles the filings, which splits the emotional and technical work sensibly.
Example
The majority shareholder of an engineering firm dies without naming a substitute executor, and the named executor has already died. The court appointment process takes four months, during which the company cannot pass a shareholder resolution to appoint a new director.
Example
An executor distributes $180,000 to beneficiaries before the final tax assessment arrives, then receives a bill for $46,000. Because the money has been spent, the executor faces personal exposure for the shortfall.
Think of it
“Executor handles your estate after death-manages your affairs and carries out your will.
Formula
Calculation
Executor fee = Fee rate x Net estate value, where Net estate value = Gross assets - Debts and administration costs.
An estate holds a house, investments and a business stake worth $1,400,000 in total. Outstanding debts, funeral expenses and legal costs come to $200,000, so the net estate value is $1,400,000 - $200,000 = $1,200,000. A professional executor charging a commission of 2.5% of the net estate would be entitled to $1,200,000 x 0.025 = $30,000, leaving $1,170,000 for distribution to the beneficiaries. A family executor who waives the fee leaves the full $1,200,000, which is a meaningful difference on an estate this size.Case study
Seen in the real world.
The following is a fictional illustration. Thornbury Signworks was a family-owned fabrication business whose founder, in this illustrative story, named his brother as sole executor without telling him. The founder died unexpectedly, leaving a 70% shareholding and a personal guarantee over the company's equipment lease.
The brother, a retired teacher with no commercial background, spent three months simply establishing what the company owned and owed. During that period the company could not appoint a replacement managing director, because the shares that carried the votes were locked in an estate with no confirmed executor authority.
The estate was eventually settled, but the business lost two long-standing customers to a competitor during the delay. The lesson drawn in the illustrative account was straightforward: naming an executor is a governance decision for any owner-managed business, and the appointment should be discussed in advance, documented alongside the shareholders' agreement, and paired with a named alternate.
Watch out
Common mistakes.
- Naming someone as executor without asking them first, which frequently produces a refusal at the worst possible time.
- Assuming the executor role is ceremonial, when it carries personal liability for mistakes such as early distributions or unpaid taxes.
- Appointing an elderly sole executor with no named alternate, so the estate needs a court application before anything can happen.
Questions
People also ask.
Can an executor also be a beneficiary?
Yes, and it is extremely common for a spouse or child to be both, provided the executor keeps the two roles properly separated in the accounts.
Does an executor have to be a lawyer?
No, any competent adult can serve, though most executors of anything beyond a simple estate hire a solicitor and pay the fees from the estate.
Can an executor be removed?
Yes, beneficiaries can apply to a court to remove an executor for misconduct, serious delay or a conflict of interest, though the process is slow and expensive.
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