Yes. This is permissible. Depending on your estate plan, you may want an independent (non-related, non-subordinate) party to serve as fiduciary (particluarly of any trusts that may be established upon death). You should speak with an estate planning attorney to guide you through the selection of fiduciaries and a coordinated estate plan.
What does the will say? Are there alternate executors named? If not, then a relative may petition the Surrogate's Court. However, the Court will be at liberty to make the appointment to qualified persons absent clear direction from the testator.
Send them a certified letter that they are only to correspond in writing. In the letter, ask them to validate the debt under fair debt collections practices act and have them remove it from your credit within 30 days under the fair credit reporting act if not validated. Have an attorney ready to answer the complaint if they serve you and then have the attorney serve them with a discovery request. (All of this is very technical and I would not recommend you do this yourself). Then have your...
Your will and your wife's will are coordinated such that if you were to die in a common catastrophe, there would be a set order of who died first to take advantage of both spouse's estate and gift tax credits and get the step up in tax basis to date of death value for assets. Usually, the husband has more assets in his name, so his assets pass through his estate to get the step-up in basis and fully use the available credit / applicable exemption amount.
The attorney is protecting himself from any allegation of wrongdoing with respct to the funds he is holding as a fiduciary. It sounds like this estate has many moving parts, especially given the fact that there are nine (9) beneficiaries. The lawyer is making sure that everyone is on the same page and protecting himself as against any future allegation by any of the beneficiaries that the disbursement was improper. This is both legal and smart for the attorney to do.