Choosing an executor or trustee is one of the most important decisions you can make when it comes to estate planning. While some people decide to name a single executor, others name multiple executors or trustees and allow them to share responsibilities. Appointing multiple executors and trustees can have certain advantages, like distributing the workload or leveraging different skills. Unfortunately, in some cases, it can also cause conflicts, delays, or other logistical difficulties. Understanding the pros and cons of appointing multiple executors or trustees can help you make more informed decisions when it comes to the estate planning process.Â
If you’re uncertain about how to structure your estate plan, you should speak to our Edmonton wills and estates lawyers today. We can advise you on whether multiple executors may be beneficial based on your specific circumstances. Contact our team today to schedule a consultation.
What Are Executors and Trustees?
When planning your estate, you are deciding how your property and other significant assets will be distributed after you pass. A key element of any robust estate plan is an executor or a trustee, who are individuals appointed by you in advance of your passing.Â
An executor is appointed in a will to manage the deceased’s estate, ensure all their debts are paid off, and distribute assets according to the wishes outlined in their will. Typically, executors are expected to:
- Begin the probate process by filing all necessary paperwork and other documents.
- Locate and manage assets left behind by the deceased, including bank accounts, real estate, investments, and more.
- Notify beneficiaries and creditors about the estate.
- Pay off any existing debts, taxes, and final expenses before distributing the remainder of the estate.
- Distribute assets to heirs as outlined in the will.
- And more
A trustee is a person appointed to manage a trust (either in a will or a separate trust document) for the benefit of others. Trustees are expected to:
- Manage trust assets responsibly
- Ensure named beneficiaries receive the assets or funds as outlined in the trust
- Handle tax filings and financial matters for the trust
- Act in the best interests of the beneficiaries and comply with the terms set out in the trust
- And more
Why Appoint Multiple Executors or Trustees?
There are a variety of reasons why people decide to name an alternate executor or trustee when they’re planning their estate. They might include:
- Support for a Primary Executor: If you would like to appoint your spouse as your executor, but you are worried about them undertaking the probate process or other legal procedures on their own, you might decide to appoint a financial or legal expert as an additional executor. This way, you can feel confident that your estate will be managed correctly across every context.
- Business Interests: If you own a business, having both a family member and a business partner appointed as executors can help ensure that your business is managed smoothly in your absence.
- Complex Assets: Certain estates might include large amounts of real estate, investments, digital assets, or other property that requires different expertise. Appointing co-executors in your estate plan will ensure you have individuals who understand every aspect of your estate.
- Checks and Balances: When multiple executors or trustees exist, it can reduce the risk of mismanagement or fraud. Although rare, when a single individual is appointed as an executor, they may not follow the wishes outlined in your will as you originally intended.
In some situations, it may make more sense to appoint a single executor. For example, if your estate is relatively simple (with no business interests or complex assets), you may not need varying skill sets or additional support. In addition, depending on your family dynamic, co-executorship may lead to disputes or conflict. At the end of the day, it is important that you weigh both the pros and cons of naming multiple executors or trustees before you come to a final decision.
The Pros of Naming Multiple Executors or Trustees
If you are considering naming multiple executors in your will, there can be many advantages. In general, executors have a lot of responsibility. By appointing multiple, you can lighten the load for the people you designate while allowing yourself more peace of mind.
The pros of naming multiple executors or trustees include:
- Workload Distribution: When an individual passes away, managing their estate (depending on its size) can take months or even years. Sharing the burden between multiple executors will make sure no single person is overwhelmed, and a collaborative effort can be made, if necessary.
- Expertise & Diverse Skills: If your estate is large and varied with many different types of assets, it can be extremely helpful to appoint multiple executors according to their skill sets. For example, one executor you appoint may be familiar with real estate, while another has a legal or financial background. If you have a large amount of digital assets (e.g., cryptocurrency), having a tech-savvy co-executor might also be beneficial.
- Built-In Checks & Balances: When executors have to make decisions together, it may reduce the likelihood of fraud or mismanagement from occurring. In addition, banks and financial institutions often require multiple signatures, which can add another layer of protection.
- Reduce the Risk of Executor Unavailability: If you have named a sole executor and they become incapacitated or pass away, there can be delays in the distribution of your assets. If you have multiple executors named beforehand, you can be sure that there will be continuity in estate administration.
The Cons of Naming Multiple Executors or Trustees
Although there are many advantages to having multiple executors or trustees, there can be negative consequences depending on your unique circumstances. These might include:
- Conflicts and Disagreements: When you appoint multiple executors, agreements must be unanimous unless your will/trust explicitly allows for majority-rule decision-making. Depending on the people you have named, disputes might arise over the valuation of your assets or the way they are distributed. In some cases, family dynamics might lead to particular conflict between siblings or heirs named in your will.
- Administrative Delays: When there are co-executors or trustees appointed, every individual must sign documentation and approve decisions. In many cases, banks, investment firms, and other real estate transactions will require all named parties to be present during signing. If you name co-executors who live in different countries or regions, it may cause logistical issues and lead to delays in the distribution of your assets.
- Increased Costs: Executor compensation will normally be split among all executors that have been named. In addition, if you decide to name a corporate trustee, additional fees might apply. If disagreements between co-executors arise that require mediation or estate litigation, legal fees may factor into costs.
- Liability Issues: It is important to note that all named executors will share liability if financial or administrative mismanagement of your estate occurs. If one executor does not fulfill the duties set out for them in the will, all other co-executors can be held accountable. If you wish to minimize legal exposure or risk for the parties you are choosing to name, you may want to evaluate whether co-executors or co-trustees are right for you.
Need Help Planning Your Estate? Contact Our Edmonton Wills and Estates Lawyers Today
Naming multiple executors or trustees can provide benefits or challenges, depending on your circumstances. The right arrangement for you will depend on your estate and the executors you plan on naming. You should always carefully consider your estate’s complexity, family dynamics, and tax implications when crafting your will.
If you need legal guidance when it comes to structuring your estate plan, Verhaeghe Law’s Edmonton estate lawyers can help you. Whether you have questions about how many executors you should name or you need help putting your plan into action, we’re ready to assist. Contact us today to discuss estate planning strategies tailored to your needs.