How many executors is too many?

Do too many cooks spoil the broth?

An executor is the person appointed to carry out the provisions in a will, including distribution of the estate. A trustee is the person appointed in a will (in the case of testamentary trusts) or other trust document (i.e., an inter vivos trust) to administer a trust for the benefit of other persons.

The role of executor of a will or trustee of a trust is often thought to be an honour and a great privilege – after all, these important roles reflect an idea of implicit trust in the nominated individuals which allow them immense legal powers.

However, as will drafters, we often re-contextualize these roles simply as a job, and like all jobs there are qualities that an executor or trustee should ideally have, which may include: financial literacy; knowledge relating to the testator or settlor and beneficiaries; neutrality; geographic proximity; rationality; and time availability.

In addition to the foregoing qualities, the determination of who should act as your executor or trustee should include a careful assessment of whether or not you should have multiple executors or trustees. For example, a highly complex estate, including one that spans multiple jurisdictions, may warrant multiple executors. In contrast, including all your children as co-executors/trustees solely to maintain fairness may not be the best choice.

Advantages of multiple executors and trustees

Built-in checks and balances. When multiple executors or trustees are appointed, they must act together. Third-party institutions, like banks, will often require the signature of all named executors to permit an action. Multiple executors or trustees are not only beholden to the document appointing them but to each other such that no action should be taken without consultation among all of them. Therefore, the risk of one individual going rogue or acting contrary to his or her fiduciary obligations, and in the worst-case scenario misappropriating estate funds, is reduced.

Varied skillsets and sharing the work. With multiple executors or trustees, your estate or trust can benefit from everyone’s skillset. By appointing multiple persons with distinct aptitudes, you can better ensure that specific aspects of your estate or trust will be managed appropriately and by those genuinely interested and skilled in the task.

You can also appoint an individual to carry out specific tasks, such as a digital executor to manage your digital assets (e.g., social media profiles, cryptocurrency, computers, websites). A technologically competent person may ease the administration of your estate. These benefits are even more apparent if the individuals you appoint are professionals; a family member who is also an accountant or a real estate agent brings his or her expertise to the table without needing to hire third-party professionals.

Inclusion of corporate trustees. In Canada, the big six banks each have trust subsidiaries that act as executors or trustees along with several non-bank owned private trust companies. Clients are often wary of using trust companies in these important roles because of the assumed impersonal nature of a corporate entity. However, by appointing co-executors/trustees you can have the benefit of a family member or friend looking after more personal matters while a trust company handles the day-to-day matters and financial and accounting tasks, easing the burden.

Residency of the estate or trust. At law and specifically for the Canada Revenue Agency (CRA), an estate is considered a trust. All trusts are deemed to be resident where their real business is carried on, which is where the central management and control of the trust actually takes place (generally where a majority of trustees/executors reside).

If you would like to have a non-Canadian resident solely act as your executor or trustee, you would be placing the central management and control of the trust outside of Canada. Therefore, the trust may be subject to tax consequences in a foreign jurisdiction and/or lose the tax benefits it may have in Canada.

Multiple executors or trustees help in such cases, as you can appoint a non-resident co-executor/trustee along with Canadian resident co-executors/trustees (including a Canadian trust company) to ensure the controlling mind of the trust remains in Canada. Similarly, including a power in your document to allow executors and trustees to add additional co-executors/trustees provides added flexibility to ensure this planning mechanism is available for your trust at the relevant time should there be a need.

Disadvantages of multiple executors and trustees

Conflict and delays. Multiple executors or trustees means multiple opinions. While a well-drafted will can provide express direction on certain matters, on others an executor or trustee will need to exercise his or her discretion or make a decision. If those who you appoint must act together, there will be inevitable delays when there is disagreement on how to handle a matter.

Conflict management provisions may be included in your document, such as a majority rules provision, which allows a majority decision to be made as binding, as opposed to a unanimous decision or a right of veto to one or more specific executors or trustees (often with protections for the dissenting co-executor/trustee).

But in some situations, these provisions can become convoluted and regardless a delay in administration occurs. Further, if you name all your children to act, you may think they will get along, but when you are not there to supervise, things can often fall apart and in the worst-case scenario result in estate litigation to remove a co-executor/trustee.

Fees and compensation. In Ontario, executors and trustees are entitled to be compensated, the amount of which can be stated in the will or trust document, otherwise it will be necessary to obtain beneficiary or court approval of compensation. By appointing co-executors/trustees, the amount of compensation provided may need to be increased to ensure that all individuals receive a sufficient amount – which is a cost borne by your estate or trust.

If a trust company is to be appointed, it is imperative that you negotiate a fee agreement, which can be incorporated into the will or trust agreement or provide that your other co-executors/trustees may negotiate such fees at the relevant time before appointing a trust company.

Practical difficulties. As mentioned, co-executors/trustees must act together. This can become difficult if they are not all located in the same area – physically attending the bank or other institutions to sign documents can be impractical. Although the digital age allows for meetings to take place or documents to be signed virtually, many executors are surprised that wet signatures or in-person attendance at a financial institution for identification purposes is still often required. Coordinating meetings among individuals can often become its own challenge.

Every estate is different, so an assessment of the pros and cons of incorporating multiple executors or trustees in your estate plan should be made on a case-by-case basis. Generally, the more complex or high-value your estate or trust, the more likely it will benefit from the advantages of having multiple executors or trustees.

For further information on these considerations, see our prior blogs on the O’Sullivan Estate Lawyers website:

Nicholas André is an Associate Lawyer at O’Sullivan Estate Lawyers. His practice focuses on estate planning, estate administration, and advising executors, trustees, beneficiaries, and attorneys for property and for personal care, as well as matters directly related to these areas of the law. This article originally appeared in the O’Sullivan Estate Lawyers blog. Used with permission.

Notes and Disclaimer

This article is the opinion of the writer and is meant to be general in nature, limited to the law of Ontario, Canada. It is not intended to provide specific personalized advice on any individual situation, including, without limitation, investment, financial, legal, accounting or tax advice. Before taking any action involving your individual situation, you should seek legal advice to ensure it is appropriate to your particular circumstances.