What happens when a Will appoints more than one Executor and they don’t agree?
A Will maker may choose to appoint more than one person to be an Executor of their Will for various reasons, including the following:
The Will maker believes that they are being fair by appointing all of their children as Executors; or
The Will maker intends it to be safety net, in case one of the Executors was unable to continue acting due to illness or death during the administration of the Estate, ensuring that the administration of the Estate continues to run smoothly; or
The Will maker wants more skill and perspective believing that joint Executors can achieve this; or
The Will maker wants to provide comfort to the beneficiaries that the Estate is being administered appropriately, as the Executors can watch over each other, ensuring that they are all acting in the best interests of the Estate.
Whilst it can be beneficial appointing more than one Executor, there are also potential challenges and complications that can arise when more than one Executor has been appointed. These challenges and complications can result in delays and further costs being incurred for the Estate to manage.
Not every estate experiences difficulties or challenges, but one of the challenges can be when joint Executors are unable to agree on something. We have dealt with all kinds of disagreements between Executors but the following are some of the more common disagreements that we see:
5. Executors disagreeing on the law firm that will be acting on their behalf in the administration of the Estate;
6. Executors interpreting the Will differently and disagreeing on how the Will is to be distributed;
7. Executors disagreeing on how assets are to be divided between the beneficiaries, especially when the Will does not specify how a particular asset or assets are to be dealt with, such as family photos, furniture or jewellery;
8. Executors disagreeing on reimbursements and what is considered to be an appropriate reimbursement;
9. Executors disagreeing on administrative matters such as:
9.1 the need to advertise for Creditors, to determine whether the deceased had any debts. As the liability would fall personally to the Executors, one Executor may want to advertise for Creditors to protect themselves from being held personally liable against potential Creditors, whilst the other may insist the deceased had no Creditors and argue that advertising is not necessary;
9.2 the need to wait the six month statutory period before distributing the Estate. Again, the Executors would be held personally liable for any claims made against the Estate before the expiration of the six month statutory period. Even if the claim is not successful, there is likely to be legal costs incurred in defending the claim, which the Executors may be personally liable for;
9.3 how the deceased’s real property is to be dealt with. We have dealt with disagreements where an Executor insists on purchasing the deceased’s real property and the other Executors want the property placed on the market and sold to a Purchaser for market value. The Executors in this case are disagreeing on how the real property should be dealt with.
10. Executors failing to communicate efficiently with each other. For example, one Executor might take it upon themselves to sell the deceased’s jewellery, without the knowledge of the other Executors. This is likely to cause mistrust with the other Executors and rightfully so. If an Executor is wanting to sell an asset, which is not subject to a specific bequest under the Will, they should be discussing their intent to sell the asset with the other Executors and then agreeing on a minimum sale price.
One of the obligations an Executor has, which must be complied with, is that they have to act impartially and in the best interests of the Estate at all times. In cases where the Executor had a close relationship to the deceased during their lifetime, such as a child/parent relationship, the Executor sometimes is emotional and are likely to have very strong opinions on how they believe the deceased’s estate should be distributed and dealt with. Being emotional makes it more difficult for them to act impartially and can result in the Executor acting in their own best interests and in ways that benefit them and not the Estate. Most of the time, the Executor does not realise that this is what they are doing and it causes tension between the Executors.
Having a Lawyer acting as a third party to more than one Executor is a sufficient way to recognise and resolve any disagreements between the Executors before they turn into disputes. When a Lawyer is involved and providing their advice and suggestions, the Executors are more inclined to listen and take on the advice given to them by their Lawyer.
In the more severe cases where the Executors cannot and will not agree on anything, even something as simple as the law firm they want acting on their behalf, it may be beneficial for the Executors to seek their own Lawyer from separate law firms and the two firms can correspond and liaise with each other to assist the Executors with administering the Estate.
If however, the Executors still cannot come to an agreement, even with their own legal representation, the following should be considered:
11. Mediation. This would involve an independent mediator identifying the issues and negotiating an agreement to resolve the disagreement between the Executors; or
12. Where one of the Executors refuses to act or administer the Estate, making an application with the Supreme Court of Victoria for a Court Order to remove that Executor. This cause of action should not be taken without serious consideration as the Supreme Court of Victoria will not grant these orders without proper reason.
When considering whom to appoint as Executors, the Will maker needs to consider if the people they are wanting to appoint get along. If the Executors are two people known to argue a lot, appointing them as joint Executors and trusting them to make joint decisions may not be in the best interests of the Estate and the beneficiaries, as it is likely that a disagreement between the two Executors will occur at some stage. Appointing people you trust to communicate and work efficiently with each other would be an effective way to avoid disagreements between Executors and therefore, ensuring the Estate’s costs are kept to a minimum.
Whilst it would be highly beneficial to appoint people who get along, no one can predict the future. It is not a guarantee that by appointing people who were known to get along at the time the Will was made, that this will completely eliminate the possibility of a disagreement. People change and some may experience a falling-out with their co-Executor/s after the Will is made. It is therefore advisable to engage a Lawyer to assist with the administration of the Estate to act as a neutral third party to the Executors.
If you require advice on who to appoint as Executors of your Will, require assistance with administering an estate or are having a dispute with a joint Executor, please contact our office on 03 9707 1155 or via email at admin@wslegal.com.au.