THE ADVANTAGES AND DISADVANTAGES OF APPOINTING CO-EXECUTORS

Many times, in discussions about a Last Will and Testament, the question arises as to who to appoint as Executor, and if there can be Co-Executors.  The answer to that depends on the situation that the person is in, and requires an in-depth discussion of the possibilities.  In certain scenarios it is advantageous to appoint co-executors for your Last Will and Testament.

For some clarification purposes, an Executor is typically defined as: “A person appointed by a testator to carry out the directions and requests in his will, and to dispose of the property according to his testamentary provisions after his decease.”  Blacks Law Dictionary.  Also see our blog post: Role of the Executor in Virginia (Not to be confused with a Trustee; see our blog post: Role and Responsibilities of a Trustee in Virginia).  A Testator is typically defined as: “One who makes or has made a testament or will; one who dies leaving a will. This term is borrowed from the civil law.”  Id. 

It is important to name someone who is trustworthy and responsible because the Executor stands in a fiduciary relationship with the Estate.  A fiduciary is defined as: “The term is derived from the Roman law and means (as a noun) a person holding the character of a trustee, or a character analogous to that of a trustee, in respect to the trust and confidence involved in it and the scrupulous good faith and candor which it requires. Thus, a person is a fiduciary who is invested with rights and powers to be exercised for the benefit of another person.”  Id.

In most cases, it is best to name one person as Executor in your Will.  This tends to simplify the process, with a reduced chance for fighting.  There are, however, certain circumstances in which it is best to name Co-Executors.  For instance, this can be the case if the person that you want to name as Executor has poor credit or is need of financial assistance quickly.  However, the state of Virginia reviews the potential Executor to determine if said potential Executor is trustworthy.  If the review indicates that the person is not trustworthy, then there is the risk that they would be not permitted to become an Executor under Virginia law.  If there is a Co-Executor that is trustworthy, in the state of Virginia’s eyes, then the problem should be solved.

Another instance in which it is best to name Co-Executors is when the person seeking to qualify as Executor is an out of state individual.  Bond is required at that point, as the Code of Virginia describes instances when bond is not required: “A. The court or clerk shall require a personal representative to furnish security. However, the court or clerk shall not require a personal representative to furnish security if:

1. All distributees of a decedent's estate or all beneficiaries under the decedent's will are personal representatives of that decedent's estate, whether serving alone or with others who are not distributees or beneficiaries; however, if all personal representatives of a testate decedent are entitled to file a statement in lieu of an accounting under § 64.2-1314, the security shall be required only upon the portion of their bond given in connection with the property passing to beneficiaries who are not personal representatives; or

2. The will waives security of an executor nominated therein.

B. Notwithstanding subsection A, upon the motion of a legatee, devisee, or distributee of an estate, or any person who has a pecuniary interest in an estate, the court or clerk may require the personal representative to furnish security. A copy of such motion shall be served upon the personal representative. The court shall conduct a hearing on the motion and may require the personal representative to furnish security in an amount it deems sufficient and may award the movant reasonable attorney fees and costs which shall be paid out of the estate.

C. This section shall be deemed to permit qualification without security where the personal representative is the only distributee or only beneficiary by virtue of one or more instruments of disclaimer filed prior to, or at the time of, such personal representative's qualification.”  Code of Virginia section 64.2-505.

Furthermore the value of the bond tends to be: “A. Except as provided in subsection B, every bond of an executor or administrator shall be, at least, in an amount equal to (i) the full value of the personal estate of the decedent to be administered, or (ii) if the will authorizes the executor or administrator to sell real estate, or receive the rents and profits thereof, the full value of the personal estate and such real estate, or the rents and profits thereof, as the case may be.”  Code of Virginia section 64.2-504, emphasis mine. 

Having an in-state person can help in that regard to prevent bond being required as discussed above.  The appointment of Co-Executors is not a decision that should be taken lightly.  Many court cases are between Co-Executors that cannot agree upon one fact or another.

It is highly advisable to discuss with a competent attorney when dealing with your Estate Plan or Trust. Call our office today at 540-443-9255, or email at [email protected] to discuss your estate planning needs with an experienced estate planning attorney.