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Wednesday, July 28, 2010

How many executors should I have?


The executor named in your Will is the person who is going to take charge of all aspects of your legal and financial affairs after you have passed away. Your executor is going to have a lot of authority, so the choice of executor is crucial.

Some people like the idea of having more than one executor, which is an option. Sometimes this is because there is a lot of work to be done. For example, the owner of a large business might want to have someone familiar with his business to act together with someone from his family. The goal there is to share the workload and pool the skills and knowledge of the two executors.

Sometimes people want more than one executor because they hope the executors will keep an eye on each other and keep each other honest.

If there is more than one executor named, the co-executors must act jointly. Neither of them is the "lead" executor or "main" executor. Each has equal legal authority. If you are considering naming more than one person to act as your executor, give some thought to how well the two (or more) of them will get along. How difficult will it be for them to reach important decisions together?

From time to time I hear from clients who want to appoint all of their children together to be their executors. As a general rule, I'm not in favour of that because I don't think it's realistic. For one thing, if four or five people have to review and sign every document, everything is going to take longer. For another thing, the chances that four or five siblings will agree on the myriad of decisions that have to be made on an estate are next to nothing. People have different values, different expectations, different decision-making styles, and of course each of them has a spouse with an opinion as well. In my experience, this is asking too much of people, particularly at a time when emotions are close to the surface and everyone is dealing with the loss of a loved one.

Having three executors is relatively rare, but does happen particularly for business owners. In this case, be sure to consider putting in a clause that allows decisions to be made by majority vote rather than unanimity, to avoid deadlocks.

If you are appointing just one person as your executor, as most people do, you must also appoint an alternate executor. The alternate does not work with the executor. The alternate only comes into the picture if the first-named executor is unable or unwilling to take on the job. In older Wills, the alternate could only take over as executor if the first-named executor had died. In more modern Wills, the alternate can also be called upon to take over if the first-named executor has lost mental capacity or simply refuses to act as executor.

Often husbands and wives name each other as their executor but aren't sure who to appoint to act when both of them have passed away. A solution that is becoming more popular is naming a trust company to do the bulk of the work, together with one of the children.

Do not choose anyone to be your executor simply because you want to do them an honour. Being an executor is hard work. Generally executors don't enjoy it. Try to choose an executor based on who is best suited to do the work you need them to do. Consider geographical distance. Consider personalities and personal skills. And of course, you must consider trustworthiness.

15 comments:

  1. My wife and her sister are their late Father's executors, the 3rd exectutor is his 91 year old 2nd wife who is now in a retirement home, I think she has to be informed of the decisions being made to provide her income, my sister-in-law wants to just go ahead and conduct renovations and rent out the family home to provide for 2nd wife's upkeep without informing, am I correct?

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    1. You are correct. This is going to backfire on them when signatures are required from all three of them on legal documents. They'll have to involve her. If the third executor is not able to act as executor, or does not want to, she has the option of renouncing (i.e. turning down the role of executor). However unless she does that, she has the legal right to be completely involved.

      Lynne

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    2. can two person have same name and last be an executor in a will

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    3. I'm missing something from this question. So... there are two people with the same name, and one is an executor of a will. Who is the other one? The owner of the will? A beneficiary? Not sure where your question is going but it's an interesting one.

      Lynne

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  2. My husband passed away 5 years ago and I am finally getting around to making a new will for myself. When he & I last did our wills together we had each other as executors, and if both of us passed at the same time our 3 sons were named as co executors. Because that was what both my husband & I agreed upon (having all 3) I now want to do the same and name all 3 of them as co executors. They all get along fine and 2 of them are twins who were born first so I can't go with naming the oldest. I know people say having 3 executors is not the best thing to do but it is what I want. My estate will be very small.

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    1. You didn't actually ask me a question, but I assume you'd like my comments about your plan to name all 3 kids as executors. I'm not in favour of it, frankly. It's really, REALLY hard for siblings to be co-executors. Every parent I've ever met has said that problems won't happen between their kids as executors, but trust me, it happens in almost every single family.

      Is there a way to choose one? It doesn't have to be the oldest. Does one live closer to you than the others? Does one work in an industry that has skills that would help with an estate, like law or accounting or money management?

      Remember that if they are co-executors, they must decide on every single thing together. Every salt shaker, every bit of paper, every sale price. All three must go to the lawyer, the bank, the accountant, the registry, the land titles office, the court. Everyone has to sign everything.

      If you simply cannot choose one, I suggest that your will include a clause that allows them to decide matters by majority vote, rather than by unanimity, otherwise the estate will be bogged down from day one. This may result in the two twins out-voting their brother every time, but that's better than being stale-mated.

      Lynne

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  3. Is it possible to reopen an estate after all parties have signed off? I have discovered so many errors and/or omissions in the way my deceased father's estate was handled. I am a daughter. One of my brothers is the executor. My sister is also the executor. Should she have been compensated for arranging the funeral which my brother (the other executor) was in Las Vegas? My brother was the main executor. Thanks so very much! Sharon

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  4. Hi Lynne: Is it possible to reopen and estate account after one has signed off on it? I am the daughter of the deceased, my dad. I have found so many errors/omissions with regard to the handling of the estate. Thanks, Sharon Benson

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    1. You could re-open an estate accounting if you had been tricked or forced into signing it, or if for some reason you didn't know what it was. But, trying to re-open it simply because you no longer find it acceptable would be highly unlikely. Allowing people to change their minds after signing a release pretty much makes a release useless. You're supposed to examine the numbers before you sign, not after.

      Lynne

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    2. Hi Lynn: Thanks for our reply.We were rushed to sign the release as we had an appt. at the bank. I just got the Release and Will 2 days ago. First that I have seen it. Everything is here except for the Accounts info. None of us saw any paperwork the day that we picked up our cheques. So we didn't examine anything on that day. We all chatted outside about other things then were rushed in to sign and go. Of course none of us really read the paper we were signing because we were purposely rushed to leave. Also the release paper does not have a date on it. There are 5 siblings (I truly believe that 2 brothers scammed us). A rough guess would be that we were scammed out of $100,000. dollars each. Thanks for your help!

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    3. I have been named as the alternate executor in my Aunt’s will. Will I be involved in the administration of anything? Do I have the right to receive a copy of the will?
      Thank you

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    4. An alternate executor only takes over if the first-named executor has died or has dementia or for some other reason can't take on the job. In my experience, if the first-named executor takes on the role, the alternate is rarely kept in the loop.

      When you ask about a right to receive a copy of the will, do you mean while your aunt is alive or after her death? While she is alive, absolutely nobody has a right to see her will except for a person who is actively working under a POA for your aunt.

      After her death, if you are not acting as the executor, i.e. the first-named executor is taking on the job, then no you don't have a right to receive a copy. You're only entitled to a copy if you are a) going to act as executor or b) you're a beneficiary named in the will.

      Lynne

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  5. Are 3 heads better than one in making decisions re an estate.....Have my 3 children as executors but thought if 2 agreed on something and the 3rd not the majority wins.....Does that have to be stated in the will

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  6. My husbands mother named 4 of her 6 children executors..what can the other two do to make sure its all divided equally

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    1. FOUR sibling executors? Good lord, that's insane. To answer your question, I will assume that the will actually says to split the estate equally. If it doesn't, then there isn't anything you can do about it.

      However, assuming that the will divides the estate equally among all of the children, the two who are not executors will receive an accounting from the executors. Make sure that it is accurate, detailed, and covers every aspect of the estate. Do not sign a release until you are satisfied with how the estate was administered.

      Lynne

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