11 Jun What happens when executors disagree?
What happens when executors disagree?
It is very common to see a person appoint more than one person as the executor of a will.
Especially when there are adult children involved who the testator wants to all have a say in the running of the estate. This is often seen as the fairest approach and a way to avoid any of the children feeling like they were left out. But what happens when joint executors disagree?
Problem with appointing all your children as joint executors
Many parents appoint their children as joint executors even when they have fractured relationships or tensions between the siblings. The reasoning is that perhaps grief will bring them back together, or the need to cooperate will bring them together. But this is usually not what happens. So you need to be careful when appointing joint executors when your children may not get on with each other.
As it can often cause problems for the estate administration.
Probate is a lengthy and often stressful time. Usually, executors are still working through their grief when they are also trying to work through the Probate process and piles of paperwork. During Probate the executors will be faced with a number of decisions on how things are going to be handled. This can include the sale of the family home and distribution of personal items of little monetary value, but of sentimental value.
All these decisions can result in disputes between executors.
Avoiding disagreements between executors
The best way to avoid disagreements is for the testator to put a lot of thought into who they want to act as their executors and only appoint people who can work together. If the executors are able to work together in a professional or friendly way then there is little chance of a disagreement or dispute arising. It doesn’t have to be multiple people but can be one person as first choice and another as the second choice in the event the first person is no longer alive or they don’t want the role of executor (and can go onto third and fourth substitutes).
If there are multiple executors dealing with the estate, open and active communication between the executors at all times throughout the process will help a lot. Keeping everyone in the loop with emails for instance and copying in all other executors as well as the lawyer should avoid misunderstandings.
Problems often arise if one executor tries to make decisions and then just asks the other executors to go along with it without providing all the information. If all the executors have all the information then decision making can be faster and unanimous.
Disputes can also be avoided by openly communicating with beneficiaries and keeping them up to date with the decisions. If a beneficiary disagrees with one executor they will often go to another executor looking for support and this can lead to disagreements between the executors.
Renouncing executor role
In Victoria, if you are appointed an executor under a Will there is no requirement that you have to accept.
If the executors know that they might not be able to work together, one of the executors can step aside before the estate administration begins. They can “renounce” their appointment as executor which means they give up their rights and responsibilities as an executor and step out leaving the responsibility to the other executors.
An alternative to renouncing is to allow the other executor(s) to apply for the grant, but with leave (option) for the executor to still apply at a later date. This allows that executor to apply themselves to join as an executor only if they feel they need to at a later date. This does add additional costs for the estate however if Probate is required twice because the original executor kept the option open and then exercised it.
Resolving disputes and disagreements between joint executors
When disagreements arise between executors, it will usually cause lengthy delays and further costs to the estate. A common misconception is that when there are multiple joint executors that majority rules and the decisions are made by the majority. This is not the case. Decisions need to be made by all the executors jointly unless the will specifically identifies a dispute resolution system.
If they are still in dispute they can try to resolve it by each executor instructing their own legal representative. This avoids the need for the executors to speak directly to each other and all communication is maintained between legal professionals. This can help to ensure that disputes do not become too emotional or get even worse by having the executors yelling at each other sending nasty texts. The solicitors can also help with advising a party on whether their requests are reasonable or not before putting it forward. The problem with this method is that it often increases costs for the estate. All executors will expect that their costs are paid by the estate, which is normally allowable by law, resulting in multiple sets of legal fees for the estate to pay out before distribution to the beneficiaries (of which may include the executors).
If disputes cannot be resolved at by the executors even with legal representation, it will likely cause the administration of the estate to come to a halt. In such a case the only option left is to apply to the Supreme Court for court orders and directions. Depending on the dispute they can ask the court for guidance on a specific part of the dispute. Alternatively, they can apply to have an executor removed. There is a very high threshold for an executor to be removed, it is therefore very unlikely this will happen over a small disagreement.
If you would like to know more about estate disputes, take advantage of our free half hour legal consults. They can be done in person or via Skype or telephone conference.