Tag: joint liability
The executor of an estate takes on many roles. For instance, they may be called on to handle funeral and burial arrangements. They may also submit the will to probate, requiring them to complete and file a number of forms with the court to prove that the will is valid and that they are the lawful executor. The executor must track down all the testator’s assets and liabilities, ensuring that all outstanding tax bills and estate expenses have been paid. They must also deal with multiple federal and provincial government officers for administrative tasks, such as cancelling the deceased’s driver’s licence, government benefits and other entitlements, along with preparing and filing the final income tax return. Once the estate’s finances are finalized, they have to turn their attention to the beneficiaries, dispersing money and property as the testator desired.
In short, there are significant responsibilities that can take up to a year, or more, to complete.
Because of this, many people name multiple executors when preparing their last Will and Testament. While there are some advantages to this approach, there are also serious drawbacks that must be considered.
To start, co-executors must agree on everything as they work together, so naming multiple executors can lead to delays and inconvenience. This is especially true if any of the co-executors live out of town or out of the province.
Let’s say a couple has three adult children. Mom and dad don’t want to play favourites, so they name all three children as executors. If the children work together harmoniously, they will have the estate wrapped up in a timely and efficient manner. However, this is often not the case.
Siblings grow apart as they get older, as different values and approaches to life develop. One might be great with numbers and dealing with officials, while another may be difficult when it comes to reaching a consensus and may not want to put in the time and effort required of an executor.
They could also be too busy with their job or family to devote the time to the myriad of tasks the position presents. Maybe they have moved away and cannot physically get to the bank and other offices to sign the required papers.
In these situations, it would be best for that person to renounce their appointment as co-executor by signing a renunciation form that can be included with the Will when applying for probate.
In cases of extreme disagreement amongst executors, one of them can ask the court to remove one or more of the other executors, allowing the estate to be settled without unwarranted delay.
Returning to our family with three children, it may be better for the parents to name just one as the executor, with the others listed as alternates. The executor doesn’t have to be the eldest of the siblings. A group conversation with all family members might lead to a consensus about who is best able to take on the role.
In some cases, it makes sense to name a family member and a financial professional as co-executors. The family member can look after the testator’s personal matters, while the financial professional turns their attention to more complex legal and financial tasks. This is an especially wise option if the deceased had significant business interests that must be managed, such as winding-up a corporation.
Every estate is different, presenting different drawbacks and benefits when considering if having co-executors makes sense. As a general rule of thumb, the main advantage of such an arrangement is that the workload and responsibilities are split up, creating a checks-and-balances mechanism since they have to jointly approve everything. Bringing in an outsider as an expert co-executor works well with complex estates.
The main drawback of co-executors is that they could delay the settling of the estate since they have to agree. It can also amplify resentment between family members, who already may be suspicious of the other’s motives. There is also joint liability – whether a decision was made together or not – which can create risks for both parties.
A better option in some cases is to name an alternate executor, who can step in if the testator’s first choice dies or is unable to fulfill their duties.
Thanks for reading – and have a great day,