Imagine a family coming together in the wake of a loved one’s passing, faced with the task of managing the estate and ensuring that their wishes are carried out. In such a delicate and emotionally charged environment, the decision to appoint family members as co-executors might seem like a natural choice. Whether it’s siblings, cousins, or other relatives working together, this approach can offer the comfort of shared responsibility and a sense of familial trust.
However, while the idea of family members jointly managing the probate process may appear harmonious, it can also bring challenges. Differences in decision-making, conflicting personal interests, or strained relationships can complicate matters and extend the time it takes to settle the estate.
Navigating these potential advantages and pitfalls is crucial for anyone contemplating appointing co-executors within the family.
Here are some key factors to consider:
Pros
Shared responsibility
Co-executors can divide tasks, making the probate process less burdensome for any one person.
Accountability
Having multiple executors ensures decisions are not made unilaterally, reducing the risk of mismanagement or unethical actions.
Family representation
Co-executors from the family may ensure that different branches or interests within the family are fairly represented, particularly in blended family situations, for example, one child from each parent being nominated as an executor.
Emotional support
Family members working together can provide emotional and practical support during a difficult time.
Expertise balance
If one executor has financial/legal expertise and another has strong family relationships, they can complement each other.
Cons
Potential for conflict
Disagreements between co-executors, especially if there are pre-existing family tensions, can delay probate and create disputes.
Prior misappropriation of powers
It is common for the same individual to be appointed as both a financial power of attorney and an executor. However, this can create issues if there are concerns about the attorney mismanaging funds during the person’s lifetime. For example, if two siblings are appointed as the executors of a parents estate, and one sibling has concerns about the other siblings misappropriation of funds during the parents lifetime, the siblings may not be able to work together as executors given the distrust between them.
Decision-making delays
If co-executors must jointly sign off on every decision, the estate administration process can become slower and more complicated.
Unequal workload
One executor may end up doing most of the work while the others contribute little, leading to resentment.
Geographic challenges
If family members live in different locations, it can complicate paperwork, banking, and other logistical matters.
Legal and financial risks
Co-executors are jointly responsible for managing the estate properly. If one makes an error, all may be held accountable.
When choosing family members as co-executors, it’s important to ensure they can work well together. A neutral third-party (e.g., a trustee company or a trusted advisor such as a legal practitioner or accountant) can sometimes be a better option to avoid conflict, depending on the family circumstances and complexity of the estate.
Common Executor Conflict Scenarios & Prevention Strategies
Disagreements over estate decisions
Scenario: Co-executors disagree on how to manage estate assets, distribute property, or handle debts.
Prevention: Clearly outline executor powers in the will and consider appointing a neutral third party (e.g., a trustee company or a trusted advisor such as a legal practitioner or accountant). Consider the dynamics of your family when choosing your executors.
One Executor doing more work than others
Scenario: One co-executor ends up handling most of the tasks while others contribute little.
Prevention: Define roles early, document responsibilities, and agree on a fair division of labour.
Allegations of financial mismanagement
Scenario: One executor is suspected of misusing estate funds or making poor financial choices.
Prevention: Require joint signatures for major transactions and keep meticulous records of all financial dealings.
- Conflicts between executors and beneficiaries
Scenario: Beneficiaries challenge executor decisions, suspecting favouritism or mismanagement.
Prevention: Maintain transparency by keeping beneficiaries informed and providing regular financial updates. Stick to the will’s instructions strictly.
Executors living in different locations
Scenario: Executors are in different states or countries, delaying document signing and communication.
Prevention: Use digital tools for communication, appoint a local executor to handle practical matters, or consider a single trusted executor.
Disputes over selling vs. keeping estate assets
Scenario: One executor wants to sell an asset such as a family home, while another wants to keep it for sentimental reasons.
Prevention: Specify your wishes clearly in your Will to avoid these types of situations.
Executors have personal conflicts
Scenario: Longstanding family tensions spill over, making collaboration difficult.
Prevention: If family conflict is likely, appointing a professional executor (lawyer, accountant, or trust company) can help ensure fairness and efficiency.
Executors fail to communicate
Scenario: Lack of communication leads to misunderstandings, missed deadlines, or poor estate management.
Prevention: Set up regular meetings, use shared online documents, and establish clear decision-making protocols.
Pros and Cons of an Independent Administrator/Executor Being Appointed
In certain circumstances, it can become necessary or desirable for an independent administrator to be appointed to act in the place of named executors. Common circumstances which lead to such an appointment are as follows:
- If there is family conflict or mistrust, particularly with executors named in a Will or where there is no Will.
- If the estate is complex (e.g., businesses, multiple properties, or large financial holdings).
- Where no family member is willing or qualified to serve as an administrator.
- When the risk of mismanagement or fraud is high.
The appointment of an independent administrator should not occur without careful consideration of the various pros and cons that family members and beneficiaries can expect in such a scenario.
Pros of an independent administrator
Neutrality & objectivity
An independent administrator has no personal interest in the estate, reducing the risk of bias or conflicts between family members and beneficiaries.
Experience & expertise
Professionals such as legal practitioners or trustee companies have experience handling estates, ensuring the process is efficient and legally sound.
Efficiency & timeliness
Unlike family members who may struggle with emotional burdens or legal complexities, an independent administrator can expedite the legal requirements and the distribution of the estate to the beneficiaries.
Conflict reduction
Family disputes are common in estate administration; an independent administrator can helps prevent or mitigate legal battles and personal conflicts between family members.
Protection against mismanagement
An independent administrator is less likely to mismanage or misuse estate assets compared to a conflicted or inexperienced family member.
Cons of an independent administrator
Higher costs
An independent administrator will charge professional fees, which can reduce the overall value of the estate. Likewise, a trustee company will also have charges and commissions that would reduce the value of the estate.
Lack of personal knowledge
An independent administrator may not have insight into family dynamics, specific wishes of the deceased, or sentimental considerations.
Potential delays
Some independent administrators handle multiple estates simultaneously, which can lead to slower processing times compared to a motivated family member.
Less family control
Family members and beneficiaries may feel disconnected from decision-making since the independent administrator must act impartially.
Limited flexibility
Professionals follow legal and procedural guidelines strictly, which can sometimes be less accommodating to informal family agreements or preferences.
How to Renounce or Resign as an Executor
In Victoria, Australia, if you are appointed as an executor but wish to resign, the process depends on whether you’ve begun administering the estate:
Before undertaking executor responsibilities:
If you have not yet carried out any executor duties, you may formally renounce (resign) from the role of executor. If you have engaged in any executor duties or estate administration, this can be considered as “intermeddling,” and this can significantly impact whether or not you can renounce from your executor role.
If you wish to renounce from the role of executor, there is a prescribed form, namely a Renunciation of Probate form, which needs to be completed and provided to the Supreme Court of Victoria to formalise the renunciation. This is commonly submitted together with the application for a Grant of Probate which is prepared by the person who was either appointed alongside you or as an alternative executor to you, or another person who is going to assume the role if no such appointment was made by the Deceased person.
We can assist you with all aspects of renouncing from your role as an executor.
After commencing executor duties:
If you’ve already started acting as an executor, or already obtained a Grant of Probate, resigning as an executor becomes more complex and can incur considerable fees. For example, things to be considered are as follows:
Seek formalised Court approval of your resignation:
You would need to apply to the Supreme Court of Victoria and seek formal permission to resign if you have not yet completed the administration of the Estate, i.e. called in all of the assets and paid all of the debts of the Estate. By contrast, if all of the assets of the Estate have been called in, all of the Estate debts have been paid but final distributions have not yet been made to the beneficiaries, then you are deemed to have transitioned to the trustee phase and can resign without needing the approval of the Court. The Court will assess your application and the purpose of you resigning and must make a determination as to whether to allow the resignation. This can involve the preparation of general administrative Court documents which also need to be supported by detailed affidavit material as to your reasons for wanting to resign, and can also involve Court appearances.
Provision of detailed accounts for the Estate during your time as the Executor:
The Court will require you to provide detailed and accurate records of any dealings you have had with Estate funds during your time acting as the executor of an Estate.
Key Considerations
Who will be the executor in your place:
If you do not have a co-executor, or the Deceased’s Will did not nominate an alternate of substitute executor, consideration needs to be given as to who would be appointed in this role. If there is not a family member or other person who agrees to take on the role, the Court may appoint a replacement executor or refuse your resignation.
Resignation or renunciation is final:
Once you resign or renounce as an executor and it is accepted by the Court, you cannot be reinstated as the executor without further application to the Court for approval and this can be a costly process that the Court would likely determine should be paid by you and not the Estate.
Legal assistance:
Given the legal complexities in resigning or renouncing from the role as an executor, it’s advisable to consult with a lawyer. iWills Legal can help navigate the legal process effectively.
Having an Executor Removed
If an executor is deemed to be unfit to act as an executor, or if they refuse to act in the role, there are options to have them removed.
Unfitness can encompass:
- Conflict of interest: Situations where the executor’s personal interests clash with their fiduciary duties.
- Misconduct or mismanagement: Actions that jeopardise the estate’s proper administration or harm beneficiaries’ interests.
- Incapacity: Physical or mental inability to perform executor responsibilities.
- Neglect of duties: Failure to communicate with beneficiaries, undue delays, or not adhering to the will’s terms.
Procedure for removal
A beneficiary or interested party must apply to the Supreme Court of Victoria, providing evidence supporting the reasons for the executor’s removal.
If there is no suitable substitute executor, an independent administrator may be appointed by the Court and this can be costly and not always in the best interests of the beneficiaries.
The Court will assess whether the executor’s conduct threatens the estate’s proper administration or adversely affects beneficiaries.
If justified, the Court may determine to remove the executor and appoint a suitable replacement to manage the estate.
Courts exercise caution in removing executors, recognising the testator’s choice. Removal is typically reserved for situations where the executor’s actions or inactions significantly impede the estate’s administration or harm beneficiaries.
Final Thought
Choosing the right executor(s) and setting clear expectations can prevent many conflicts. Would you like guidance on structuring an estate plan to minimise disputes? iWills Legal is here to help provide expert legal and practical advice with managing these sensitive and complex family matters. Get in touch today.
