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Chapter 2

An Executor Must Follow the Will

Though the heading “an executor must follow the will” seems straightforward, a failure to do so includes a whole variety of ways in which you can get into real trouble. Executors do not always understand — or perhaps, do not want to accept — that the will is the foundation of the estate. It is not simply a document that confers a title of authority on him or her; it also contains important instructions for an executor to follow. Doing anything else amounts to paying the wrong amounts to people, which creates liability for the executor.

1. Making the Will “More Fair”

One scenario that is shockingly common is that of an executor who decides that the will “isn’t fair” and decides to distribute the estate in a way not set out in the will. Typically, this happens in a family when one sibling is made the executor. He or she may think it is unfair that everyone gets the same amount under the will when one sibling was a caregiver to the parent for years and received nothing for it. Or, he or she might decide that it is not fair that one person is supposed to receive more than another person, since their parents loved all of them equally.

Executors and beneficiaries alike may be confused when they see a will that, on the face of it, treats the beneficiaries differently, when over the years they have heard their parents say that everyone would be treated equally. They forget that their idea of what it means to be treated equally simply may not be the same as that of the parent. They may not know everything that transpired between the parents and each child.

Rearranging the distribution in the name of improved fairness may also arise in a blended family. An executor who is a member of the deceased’s first family may decide that it is not fair that some of the estate goes to the second family, or vice versa. Occasionally, executors who are children of the first marriage attempt to ignore their parent’s wish to leave a part of the estate to the new spouse. Blended families can be a minefield of estate litigation because of executors who get caught up in emotional issues of what is and is not fair.

Sometimes executors overlook the fact that on intestacy, all biological children of the deceased are included in the distribution to children. If the deceased had a child of a previous marriage, or had a child out of wedlock, that biological child is entitled to the same share as a child who was born in the deceased’s current marriage. This is true even where the deceased had little or no contact or relationship with that child.

Despite the fact that an executor can convince himself or herself that this is reasonable, it is not. It is neither the executor’s will, nor the executor’s money, and therefore it is not the executor’s decision to make about what is fair. Like it or not, the executor’s job is to carry out the instructions contained in the will and not to change them to suit his or her own values.

An executor who changes a will to make it “more fair” runs a very substantial risk of being sued by someone who is left out in the cold by the reconfiguring of the estate distribution. In fact, a lawsuit against you is all but guaranteed in that circumstance. If you have been named as an executor but feel that you simply cannot deal with an estate because it is just so unfair in your mind, then perhaps you should decline the job altogether.

2. Giving Personal Items to Those Not Entitled to Them

Another situation that is distressingly common is when the executor allows family members or others who are not named in the will to select personal items from the deceased’s home as a memento. Though this sentiment is usually well-intentioned, it is not within the executor’s authority. If you allow this, the beneficiaries have a right to object, and you should expect to pay for those items out of your own money.

This is a tough one for many executors. You may be pressured by family members who will play on your sense of fairness and loyalty to family members. You may end up feeling guilty and tight-fisted if you refuse to give a Royal Doulton figurine to a niece or the power tools to a grandson, even though those individuals are not named under the will. Try to remember that although it may please that niece or grandson to be included, your actions will likely upset someone else.

Not all wills contain specific instructions on how to deal with household and personal goods. The best wills contain a separate paragraph or two that give directions as to who may share in the division of household items. Usually this will include giving the executor the power to resolve a dispute when two beneficiaries want the same item. Remember that if household and personal goods are not specifically mentioned in the will, they become part of the residue of the estate and belong to the residuary beneficiaries. They are not yours to give away.

If two beneficiaries want the same item from the estate, you must resolve the dispute. Take care to use a method of resolution that is fair to both people and shows no favouritism on your part. Flipping a coin is acceptable.

3. Not Following Trust Instructions

On occasion, an executor is directed by a will to set up a trust for an individual. The reason for a trust described in the will you are administering may or may not be obvious to you from the will itself. Most people realize that trusts are required for underage beneficiaries and individuals who are mentally challenged. Many people also know that trusts can be set up for people who are not very good at handling money. However, there may be any number of reasons that the deceased wanted a beneficiary’s share to be held in trust.

Trusts are sometimes set up because the deceased wanted to protect the beneficiary from creditors, or from a spouse in a shaky marriage. The deceased might have wanted to preserve an asset for another beneficiary after the first one. Perhaps the trust was set up so that the beneficiary would not be moved up to a higher tax bracket. You may not know the reason for the trust, but you are still required to set up the trust as directed by the will.

If the will directs you to set up a trust, it is not up to you to decide that a trust is not really needed. That decision simply is not within an executor’s authority.

Beneficiaries are sometimes annoyed or even angry that their inheritance is to be held in trust. They take it as an insult. They make comments such as “I’m not a minor, and I’m not disabled, so why can’t I have my money now?” They will pose the same question to you, the executor, and will exert a great deal of pressure on you to simply hand over the inheritance.

Before you give in to that pressure, consider this situation. Say the will instructs you to hold $100,000 in trust for Roger until he turns 30. Roger is now 22. The will contains the usual wording that Roger may have access to the money for medical or educational expenses at any time before then. Neither you nor Roger can see any obvious reason for the trust, so you pay it out to him.

However, every trust is written with instructions on what to do with the money if the beneficiary does not reach the age set out for receipt of the money. Say, in this case, that the will says that if Roger passes away before age 30, Roger’s sisters will receive the money in the trust.

Let us say that Roger dies at age 28 in a car accident. His sisters then step forward to claim the $100,000. The funds are no longer in trust because you paid them to Roger, who left them in his will to his wife. You would be liable to the sisters for the $100,000, plus interest.

The only safe route for you is to set up the trust as directed by the will. There are some parts of estate distribution that may be changed if all beneficiaries agree in writing, but this is not one of them. If there is a good reason to challenge the money being in the trust, you may approach the court and ask for permission to do so. However, you should be aware that courts in general do not like to second-guess the testator’s reasons for the trust.

4. Ignoring Parts of the Will

Similar to ignoring trust instructions, this section refers to an executor who decides to follow only the parts of the will that are convenient. An example of this is an executor who really does not feel like working with a co-executor, so simply ignores the part of the will that appointed the second executor and does not tell anyone about it. This has been tried by some executors, but they are always found out.

Executors have also been known to ignore sections that they do not believe to be fair (as discussed in section 1.). For example, an executor might not want to sell the family farm even though that is directed in the will, or may not wish to pay out a bequest to a charity. The fact that the executor wants to farm the land himself or herself, or does not approve of the named charity, is simply not good enough.

As an executor, you must carry out all directions given in the will, even if some of them are not what you would have done had the property been yours.

5. Acting while the Testator Is Still Alive

A fact that does not always seem to be clear to those named as executors is that they have no authority under a person’s will until that person has passed away. A surprising number of people will attempt to look after a parent’s estate while the parent is still alive. These executors state that they are allowed to sell Mom’s house or distribute Dad’s bank account because of their appointment as executor.

These individuals in fact have no legal right whatsoever to access the parent’s assets. They likely have the roles of executor and Power of Attorney confused. Only a person named under a Power of Attorney document may deal with a person’s assets while that person is still alive.

Many an executor has experienced frustration, confusion, and even anger when banks, lawyers, realtors, and financial advisors refuse to help them deal with the parent’s assets while the parent is still alive. The simple solution, if the parent still has mental capacity to deal with legal documents, is to advise the parent that in order to provide help sooner rather than later, the executor will also need to be named under a Power of Attorney.

When you think about it, this makes perfect sense. Nobody can sell our assets, because we own them. The fact that we have named someone to do something for us in the future does not allow him or her to take, sell, or distribute what we own now. Executors who are the children of aging parents often do not seem to be able to step back and see their parents as individuals with rights that exist outside the family. They tend to think that because they are the children of that person, they can usurp that person’s rights when that person gets older.

The law simply does not allow this. Being someone’s child does not give you any right to dispose of his or her property. Being named as someone’s executor does not give you any rights while he or she is alive. You must still follow the law, even with your parents.