How do you choose an executor for your will? – the horror story edition
Part of a writing a will involves considering who you will appoint as executor to administer your estate after your death and to arrange your funeral and cremation or burial.
One of the questions we are often asked is whether it is beneficial or a hinderance to appoint more than one executor. The answer is that it is a very personal decision, based on your particular set of circumstances.
Why do people want to appoint more than one executor?
There are a number of reasons people think they should appoint more than one executor. Here are three of the most common ones.
Fear of overburdening one child while neglecting others
Sometimes people want to appoint more than one executor because they have multiple children and are afraid of upsetting those who are not appointed, or burdening just one of them with the responsibility.
You should be remember, however, that there are many other roles that children can take on as part of your estate planning. These include being appointed as Enduring Guardian for medical decisions, or as an attorney under a Power of Attorney for financial decisions, should you become incapacitated or unable to make such decisions on your own.
These roles can be shared among multiple children or family members. (For more information, please see Power of Attorney and Enduring Guardianship – the horror story edition and Revoking a Power of Attorney or Enduring Guardian in NSW.)
Concerns that sole executor might die
Some people are concerned about what would happen if the executor can no longer fulfil their role or dies.
Although this can and does happen, it can be easily remedied by nominating others as substitute executors.
Substitute executors can step into the role if necessary. This is a very simple step in writing a will.
Nominated executor not entirely trusted
Some people do not trust their family members or friends to do the right thing with their estate, and think that if they appoint more than one person, there will be increased checks and balances on any decision-making.
While appointing more than one executor can indeed provide reassurance in this regard, the issue can also be overcome by nominating a third-party service or person to be appointed as executor, such as an accountant, lawyer or State Trustees.
Of course, there are commissions or fees involved in appointing a professional to be your executor, which will impact your estate. This should therefore be detailed very clearly in your will.
Why is it easier having just one executor?
In most cases, the easiest option is to appoint one executor. Appointing more than one can create difficulties.
For example, there is a chance of disagreement or conflict, with every decision made about the administration and distribution of the estate needing to be agreed upon by all executors.
If there are disagreements which cannot be resolved, it can end up in court, or with an arbitrator trying to resolve the dispute, which can reduce the entitlements and cause delays to the administration of the estate.
Case study #1 – If they don’t get along while you’re alive…
A father appointed his two sons, who never got along, as executors of his will. Unable to agree on how to deal with the father’s assets after his death, they fell into dispute, forcing them to obtain independent legal advice, which cost of each of them approximately $10,000.
They finally saw sense and began putting their differences aside to save on legal costs.
The lesson – children who do not get along while you are alive are not likely to get along after you die, so think twice before appointing them to be your co-executors.
Practical difficulties of having multiple executors
Having more than one executor can create difficulties in having documents signed, particularly if the executors are located in different places. It can be logistically difficult to have multiple parties needing to sign documentation. This in turn can create delays.
A further point to consider is that when there are multiple executors, one may choose to step down or renounce their role, which creates an additional expense for the estate.
Finally, appointing two executors does not guarantee that all executors will play fair in any case.
Case study #2 – Appointment of siblings as executors leads to court action
A mother appointed her two children as executors. They were also both beneficiaries of the will. One child moved into the mother’s property after her death, with the intention of purchasing the other child’s share in the property.
The child who moved into the property did not proceed with the purchase of the other’s share in the property and instead lived in the property rent-free.
The other child made an application to the court to have a trustee appointed to sell the mother’s house and account to all of the beneficiaries of the mother’s estate for the proceeds of sale.
That child also applied to deduct, from the inheritance of the sibling who occupied the house, an occupation fee for living in the house rent-free and the legal costs of tens of thousands of dollars incurred by appointing a trustee for sale.
Inform your executor or executors of their appointment
One of the most important things is to ensure you tell your executor or executors they have been appointed – or ask them prior to appointing them.
There is no legal obligation to tell someone they have been appointed and a lot of people choose not to tell, due to a fear of the person declining the role, or because they do not want to upset their family and friends by informing them who they have selected as executor.
The problem with this is that there is a greater likelihood of the selected person renouncing or declining the role, as they had no forewarning. There is often a lot of work involved in being an executor, and many people may not want the responsibility.
Case study #3 – Reluctant executors not informed of their appointment
An elderly gentleman appointed his neighbours – an older couple not friendly or particularly familiar to him – as his executors. He had no family in Australia, and had not informed them of their appointment in his will.
After he passed away, the neighbours reluctantly took on the responsibility of executors. As part of administering the estate, they had to liaise with all of the family members overseas, which was difficult and time consuming.
They claimed a commission from the estate due to the pains and troubles of having to act as executors. In instances such as these, it would be preferable to appoint a professional or a third party to handle the estate.
Ensure you choose an executor who will act in your beneficiaries’ best interests
Ultimately, you want to appoint an executor you can trust to act in the best interests of all of the beneficiaries of your will.
Appointing one person or multiple people that you trust to act fairly will hopefully ensure that your estate is administered as you wished.
Case study #4 – Delay in obtaining grant of probate leads to legal action
A mother appointed her son as executor. Without good reason, the son chose to live in the mother’s house after her death rent-free and then proceeded to go slow on obtaining a Grant of Probate and putting the mother’s house up for sale.
The other children applied to the court to have the son removed as trustee of the mother’s estate.
They also applied to have a substitute trustee appointed to sell the mother’s house and account to all of the beneficiaries for the proceeds of sale, with deductions made from the son’s share for occupying the house and the legal costs of tens of thousands of dollars incurred for removing him as trustee.
Executor’s role in deciding funeral arrangements
You should also remember that your executor not only has a role in administering the estate, but also in deciding your funeral arrangements and organising your burial or cremation.
Therefore you may want to ensure that you have discussed or specified your wishes in regard to these matters in your will.
Case study #5 – Dispute between siblings over storage of parent’s ashes
Appointing one person as your executor allows that person to instruct the funeral director about the way in which the funeral is to proceed, whether you are to be buried or cremated, and the collection or storage of the ashes.
We have seen problems arise within families when one child was made executor and decided to keep the ashes personally at his home, much to the anger and dismay of his three siblings.
It can also be problematic where the surviving spouse is the executor of the will and a step-parent to the children. If the surviving spouse makes decisions without consulting the children, they may feel they should have the right to be involved in the decision-making, given it was their parent who passed.