My Three Sons Are All Co-executors Of My Will And Two Live In The U.s. Will This Cause Problems?

Q. Ten years ago, I named my three sons as co-executors of my will . My two eldest children now live in the United States with their families. Will this make management of my will more difficult in any way other than in location? Do all three executors have to sign all documentation or is there a wording that can be made in the will to adjust this? And what happens if my children (all three executors) disagree? If this will cause too much trouble, is there a better alternative for who should be the executor? Or is this arrangement still fine? I’d like to do the right thing. —Thank you, Ian in B.C.

FP Answers: Dear Ian, you ask if having your three sons as executors is a good idea. I do not know your marital status, whether you have a marriage contract or the age of your children. Every estate has different needs . Estate executors are referred to as personal representatives or estate trustees. Family executors can be trustworthy, effective and economical. Or, sometimes, only two out of these three.

Factors that go into choosing executors depend on the type of assets you have and who your beneficiaries are. Executor compensation can be a worry or a fixed amount in your will.

If your sons are conflicted, consider a relative or a neutral executor who lives near you who may be preferable.

Decisions of estate trustees must be unanimous. All three sons must agree and sign all legal documents. You can possibly vary this requirement by including a majority decision rule in your will. Your lawyer can best advise you .

Three executors may not simplify estate administration, especially if two of them are not in the jurisdiction to close a business or sell a house. I had three professionals named as executors. None of them wished to quit or renounce before they started working. They all wanted to honour their promises. Because of scheduling conflicts, it took months to meet with all three executors.

Are you leaving a property to all three children? Consider how to divide the property. What if one of the three wants the property sale proceeds divided, and the other two want to buy it? All executors must agree on the price. Set a price formula in a will and a decision maker to decide fair market value for taxes. Should your spouse be involved?

Can you reduce your provincial estate tax in British Columbia? You need tax advice since two of your sons are residing in the United States and are non-residents for tax purposes. The majority of your executors should be Canadians for income tax. Your sons in the United States may need to advise their state and federal authorities that they control foreign assets.

• Can we cut daughters from a previous marriage out of our will and leave everything to our son without risking an estate fight?
• Does a newly discovered half-sister have any rights to mom’s estate?

Although Canada and the United States have a common law tradition, they have different estate and tax laws. Canada has no gift tax and no federal estate tax. In Canada, certain assets are deemed sold at fair market value and included as income in your final tax return. You will need a cross-border tax adviser to create a tax plan to include your non-resident children and grandchildren.

Bonding of foreign executors is at the court’s discretion. You cannot control this but you can authorize estate payment.

Congratulations on reviewing your estate plan. A lot has changed over ten years in your tax world.

This information is no substitute for legal or tax advice. Edward Olkovich is an Ontario lawyer at MrWills.com. He is certified by the Law Society of Ontario as a specialist in estates and trusts law.

Do you have a question for FP Answers? Email wealth@postmedia.com.