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Thursday, March 10, 2011

Why oh why don't people think more carefully about choice of executors?

In my daily work, here on my blog and at seminars, I hear stories from individuals about estates gone horribly wrong. Every day brings a new crop of disasters. Something that many of them have in common is that the executor is getting away with something he shouldn't.

Some of the most common complaints are executors who move into the deceased's house and won't pay rent or move out, executors who can't account for money gone missing, executors who won't tell anyone anything and get angry and aggressive when pushed, and executors who just won't do anything. Every now and then I hear stories about documents being forged, burned or hidden. Then there are the executors who basically ignore the will and distribute the estate in a way that they think is better than what the deceased decided, playing favourites and causing havoc in the family.

It makes me wonder. Why are there so many stories like this? Why is the administration of an estate always such a horrendous ordeal?

A big part of the problem is that people don't put any thought at all into the individuals they choose to represent them. If you choose someone because they are related to you, and you deliberately choose to overlook their faults, then why be surprised when they don't have the qualifications they need to do the job? If you didn't make any attempt to get someone honest and organized with good communication skills, why be surprised when the person you chose is shady, disorganized and combative?

I find it astonishing how many parents will put one of their kids in charge of their life savings and trust them with their will, then tell me that the child is bad with money, has borrowed thousands from Mom and Dad during his lifetime, can't get along with his siblings, has a gambling addiction or has a marriage on the rocks. It makes no sense! Why are they doing this?

Is it because people think they legally must put their kids in charge? Is it because they don't think they have other options? Is it because they think the child won't charge a fee? Is it that they have never heard of trust companies?

The longer I work in this business, the more I wonder why people are so blind about their own family members. Unfortunately, the price is paid by the loved ones left behind who have to struggle through the estate administration at the hands of someone who never should have been left in charge.

2 comments:

  1. I know this is an old post but I hope you'll be able to address my comment anyway. I, too, wonder why people choose the executors they do without accounting for the duties involved.
    I am the successor of the farm (though after 8 years I am still waiting on a succession plan being more than just my father's promise that he is looking into it). I have two siblings, one of whom has stated she wants nothing to do with the farm and the only expectation she has is she would like what my parents deems as a fair inheritance for her. My brother, on the other hand, originally planned to succeed my father on the farm and worked there for a few years. After much drama and heartache, he left the farm. The trouble lies in the fact that he is the oldest son and my father still thinks (in spite of all the negative evidence against their relationship and my brother's blatant disregard for the welfare of my parents) that he walks on water. My father has, on several occasions, tried to bring my brother back into the farm. My brother has looked at the numbers and likes the income potential but is unwilling to do the work (and his wife hates farming so I’m sure she has some influence there).
    As my father is rather traditional (oldest son is at the top of the totem pole and it is very difficult for him to be okay with his daughter running the farm) my brother has been named the executor of their. The current farm is not even the same farm (we've since purchased a new farm and expanded) that my brother worked on and I'm the one currently running the office, dealing with the farm's paperwork, accountants, lawyers, bankers etc. I also have experience in the financial services industry (I used to deal with investments, insurance and retirement/estate planning, before farming) as well as business background and access to and knowledge of the whole farm corporation as well as many of my parents' personal assets and records (they live next door and I work in their office regularly). As my brother has no experience in any of these areas, he lives nearly 4 hours away, and I am the successor, I feel it is unwise to have him named as the executor. He has a full time job 4 hours away, he doesn't even have the time! I really want to avoid the potential that he will stall the estate as well as the fact that I'll be doing all the work (gathering documents etc) anyway.
    I have scoured your blog to see if you have any good information about choosing an executor for a farm but have mostly come across other general posts (which I’ve bookmarked to bring up at our next meeting). Is there anything specific that you have written that I could show my father in this regard? (I will add, as a personal note, that my brother and I have a rocky relationship and he has a bit of a superiority complex when it comes to me. Another residual of growing up in such a traditional household, where women are meant to wash dishes and cook dinner, not run corporations. To put it bluntly: I don’t believe he will have the best interests of the farm in mind and will make liberal use of the executor’s fees and expense account.)

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  2. I also should add to my previous comment that I am the only residuary beneficiary in the will.

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