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tax & estate Are co-executors a good idea? The pros and cons of two (or more) people managing an estate by James Dolan At first glance, naming two executors to jointly administer an estate seems like a smart idea: two heads are better than one, particularly when it comes to the complex decisions and administrative tasks that can overwhelm a single executor. But can naming co-executors also be more trouble than it’s worth? Solange Buissé, associate with Taylor McCaffrey Lawyers in Winnipeg, says estates with two or more executors are fairly common. Naming a family member as co-executor alongside a financial professional gives the testator somebody to help with the more personal aspects of the estate, she says, as well as a professional to handle the more complex legal and financial tasks. For example, a testator could name a son and an accountant as co-executors. “The son can work on emptying the house and dividing the personal effects, and the accountant can work on winding up the family corporation,” she says. Co-executors can also create checks and balances, Buissé says. “A testator may trust their kids to make good decisions, but they want to make sure that every- one else is protected, so they want to name a second person to be executor with them.” However, Buissé stresses that, in most Canadian jurisdictions, executors are considered jointly liable for all estate decisions — whether those decisions were made together or not. “If someone comes in and says, ‘My brother’s the executor with me, and he did this and I wasn’t involved,’ it doesn’t matter,” she says. “If that person is aware of it and does nothing, they are still responsible for it. They’re liable to the beneficiaries.” Gurpreet Randhawa, principal at Sitka Law Group in Victoria, B.C., says most estates with co-executors result from clients naming two children so as not to offend one. While she doesn’t try to talk clients out of the strategy, she strongly encourages parents not to view co-executorship as a solution to family disputes. “Rather than making the relationship better, and resolving past conflict, it probably would have the oppos- ite effect,” Randhawa says, pointing to the stress and grief associated with the executor’s role. Randhawa says executors who recognize that the part- nership isn’t going to work have the option of renouncing their position. This should be done early in the process, preferably before taking any actions. “As soon as you’ve intermeddled with the estate, or been involved in any asset, you’re attracting liability,” she says. Renouncing the executor’s role becomes more compli- cated if it’s delayed. An executor will first need to notify their co-executor of their intention. If the co-executor agrees, both parties should list what tasks each party has done up In most jurisdictions, executors are considered jointly liable for decisions to that point, and sign a formal renunciation document. If the co-executor doesn’t accept the renunciation, the only recourse is to make a formal application to the court for per- mission to step down. The court may not grant it. Rhandawa points out that will-makers can avoid such problems by looking for some warning signs of future conflict between the proposed co-executors, such as whether they get along, whether they live in different cities, or if one of them might not be able to do their fair share of work because of life circumstances. “It takes co-ordination for both parties, especially if they’re both working and have careers and their own fam- ilies,” Randhawa says. “Really it’s up to the \\\[will-maker\\\] to decide \\\[if\\\] they’re comfortable, based on the pros and cons.” AE NICK SHEPHERD / GETTY IMAGES Co-executors: pros and cons PROS Dual perspectives: A close family member can provide a financial professional with a more personal outlook on financial distributions and estate administration. Professional expertise: Naming a professional co-executor can help family members deal with complex estate assets (e.g., a family business, cross-border assets). Division of labour: Having two (or more) executors to divide estate administration can help wrap up the estate more quickly. Checks and balances: Because all estate decisions must be reviewed and approved by more than one per- son, co-executors can act as a natural “double-check” on all estate decisions. CONS Delays: Coordinating meetings and exchanging documents between co-executors can add considerable time to estate administration, par- ticularly when co-executors live in different cities. Amplify family conflicts: Forcing family members who don’t get along to work together can often lead to more conflict and disagreements—which can create even further delays. Joint liability: The law considers co-executors equally liable for each others’ actions; this can increase risk for one (or both). 10 OCTOBER 2019