I DON’T CARE IF JOHNNY IS IN JAIL, HE’S MY LITTLE BOY!

MISTAKE # 24

Naming all your children as your executors

IT’S A REAL MISTAKE to let your unconditional and equal love for all of your children lead you down the path of naming all of them as executors of your estate. Oh, we know that Johnny and Rosanna are every bit as smart as your other three children. Really, the justice system was so unfair to Johnny on the one and only occasion he used marijuana, and very soon Rosanna’s writing will take off and she’ll be able to pay her own rent and buy her own groceries. Why, those two have hearts of gold!

Parental delusions are a wonderful thing, but it is a bonehead idea to name Johnny and Rosanna as two of your four executors, along with Bradley, the chartered accountant son, and Linda, the busy mom who is also running a successful small business.

The life challenges Johnny and Rosanna face aren’t the only reason to think twice about naming all four children as your executors; some of the other reasons are:

• A team approach to administering an estate is often a poor idea, no matter who is on the lineup.

• The children will be faced with the difficult discussion about some of them renouncing the job—and failing that difficult decision, they’ll face the cumbersome job of working together to get the job done as one big, happy family.

• The law requires that executors must act unanimously (unless the will states otherwise), so the big, happy family approach can and will be sorely tested.

Let’s look at those issues more closely.

just too many . . .

The first problem is that an executor team is a bad idea in 99 percent of estates: by and large, a competent person is best left to his or her own devices to administer an estate. He or she can hire professional assistance as and when needed.

For example, an executor will likely want to use a lawyer to assist with getting the certificate from the court formally appointing him or her as the estate’s administrator, and, depending on the estate assets, other advisors may be needed such as an accountant, investment advisor, real estate agent or antique valuator.

The reality is that administering an estate includes a lot of painstaking, detailed work. An executor needs good walking shoes to get around to all the banks and other places that need death certificates. The idea of going to a lawyer’s office to hear the reading of the will and retiring as a family to an oak-panelled library to discuss the estate is a myth—a nice one taking us back to a Dickensian era, but a myth nonetheless.

renunciation

A person named as an executor in a will is not required by law to accept the job. In other words, the executor can decide to renounce the appointment, so long as he or she has not intermeddled in the estate, intermeddling being a wonderful legal term that roughly means, “sticking your nose into the estate and doing stuff.” Armed with this knowledge, you might assume that you can merrily appoint all of your children in your desire to be fair and loving, knowing that maybe the situation after your death will look after itself because a few of them will renounce.

Hang on there . . . in our experience, families that are smart enough to decide to do this are ironically the ones that likely could forge on and do a good job working together. They get together after the dust has settled after the funeral and agree that while it was very nice of Mom and Dad to name the whole lot of them, they wisely realize that it makes the most sense to let Bradley do the heavy lifting while the rest of them watch from the sidelines. They understand that there is a difference between being one of the executors and being a beneficiary. After the dust settles, they will all share equally in the estate.

On the other hand, those siblings who will need combat gear after a month or two of working together are the ones who insist they all need to be involved.

So don’t shift the responsibility for being responsible to your kids—chances are good that your approach will backfire.

unanimity

There are all sorts of ways you can state in your will that your executors do not need to all agree, the simplest being a statement that the majority of executors agreeing on a course of action will carry the day. But parents who dither about naming only one or two children rather than all of them are also inclined to think that their kids will come to a magical consensus on everything from dividing up the heirloom china to selling the cottage at Red Deer Lake. Getting that consensus is probably unlikely and even if you do include a majority-vote clause in your will, think about the children who are not in the majority: hurt feelings will occur every time this happens.

points to take away

• It is perfectly normal to love your children equally and to want this to be demonstrated in your will, but think through the real-life, real-time consequences of naming all your children as your executors.

• Naming all of your children as your executors can be a landmine even if your estate should be relatively simple. Never underestimate the damage that can be done when people fight and emotions are involved.

• If it is at all feasible to do so during your estate-planning process, have an open discussion with your family as to whom you are naming as your executor or executors, why, and how all of your children will be treated equally (if that is the case!) in the distribution of your estate.