Under Pennsylvania law, an executor is the individual named in the will to take responsibility for the administration of an estate after a person dies. Administration of an estate involves paying the debts and distributing the assets of the estate. An estate may have two or more executors. These entities are termed “co-executors” or “joint executors.”
There is no difference between an executor and a co-executor. The court uses the term “co-executor” when there are two or more executors rather than a single executor. It is possible for an executor to serve jointly with a trust company incorporated in Pennsylvania, or a national bank with its principal office in Pennsylvania.
How Co-executors Act Together
How joint executors administer an estate depends on the identities and locations of these entities. It also depends on whether the entities are individuals or institutions, like banks. Co-executors are supposed to work together toward common goals.
One goal is to distribute the assets to the beneficiaries, the individuals who will receive the assets from the estate after the attorney and creditors have been paid.
When one or more co-executor dies or is removed as a co-executor, the surviving or remaining co-executors will have all the powers of the original co-executors. The exception is if the will provides otherwise. If the co-executors have a dispute, the decision of the majority will control unless the will provides otherwise.
Majority Decisions of Co-executors
A dissenting co-executor can join with the majority to carry out a majority decision that requires affirmative action, such as selling real property in the estate. The court can order the dissenting co-executor to assist with carrying out the majority decision.
The dissenting co-executor will not be liable for the consequences of a majority decision even though they join in carrying it out. The dissenting co-executor must express their dissent promptly to all the other co-executors.
When Co-executors Disagree
When the co-executors have a dispute about the exercise or non-exercise of any of their powers, and there is no majority agreement, the court may direct the exercise or non-exercise of the power as the court deems to be in the best interest of the estate. The exception is if the terms of the will provide for this situation and the will states otherwise. .
The court will act to direct the co-executors after any of the co-executors or a party in interest – an entity affected by the administration of the estate – files a petition regarding the concern. The court can require that the co-executors act aided by the report of a master, meaning an attorney appointed by the court with experience in estate matters.
How an Executor Is Chosen
Typically, the testator, or person who drafts the will, names the executor in their will. A testator may name two or more co-executors in a will. There is no limit to the number of co-executors a testator can name in a last will and testament.
If the testator has not named an executor in their will, the probate court may interpret the wording of the will to determine who can administer the estate.
If there is no will, the court will appoint a person to serve as administrator for the estate. Usually this is a spouse or child of the decedent. A person is required to file the petition for grant of letters of administration with the Register of Wills to be recognized as the estate administrator. They must also pay the estate administration fees, which vary by county.
Why Name Multiple Executors?
A testator may name two or more people as co-executors so as not to make people feel left out. For example, if a testator has four children, they could name all of them as co-executors in the will. A testator may also name more than one person as an executor to assist with the administration of the estate.
A married person may name their surviving spouse as a co-executor. Their spouse will be familiar with the family home and personal property in it.
The testator may also name a former business partner as a co-executor so that person can assist with running the business. A testator can state in the will what specific duties they want each co-executor to handle.
General Duties of a Named Executor
An executor is a fiduciary, a person in a position of authority, who is obligated to act on behalf of another. As to an estate, an executor, or two or more co-executors, serve as fiduciaries for the beneficiaries. They must act in unison as much as possible to administer the estate in a way that does not disadvantage the beneficiaries.
When applied to wills and trusts, persons who qualify as fiduciaries include executors and administrators, guardians and trustees. Individuals and corporations such as banks are required to act as fiduciaries when they serve as an executor or as co-executors.
Executors Must File a Bond
An individual who serves as an executor must file a bond to administer a testator’s estate. If individuals serve as co-executors, each person must file a bond. A bond is not required for an executor or co-executor if the entity is a:
- Bank and trust company, or trust company incorporated in Pennsylvania.
- National bank with principal office in Pennsylvania.
- Foreign (out-of-state) corporate fiduciary or national bank with principal office in Pennsylvania. Either of these entities must be otherwise qualified to act if the laws of the state in which it is incorporated or in which the national bank is located provide a similar exemption for corporations like Pennsylvania.
Estate Tax and Pennsylvania Inheritance Tax
Estate tax differs from inheritance tax in that estate tax is based on the net value of the property owned by the decedent. Typically, the executor or administrator pays the estate tax out of the assets of the estate. A state government imposes an inheritance tax on the beneficiary.
The rate of inheritance tax depends on the identity of the entity receiving the property and how much they receive. For example, under Pennsylvania state law, there is no inheritance tax (or a zero percent rate) on a transfer to a surviving spouse or to a parent from a child aged 21 or younger.
There is a 4.5 percent inheritance tax on a transfer to a direct descendant, such as from a parent to a child. There is a 12 percent inheritance tax on a transfer to a sibling.
How an Attorney Can Help
An estate and trusts attorney can provide a testator with legal advice about the administration of a Pennsylvania estate. The attorney can assist with estate planning, such as drafting a will or trust. A trust can help avoid the cost of the estate going through the probate process.
The attorney can also share information about how a testator or decedent can avoid or reduce estate tax and inheritance tax.
Jessica Zimmer is a journalist and attorney based in northern California. She has practiced in a wide variety of fields, including criminal defense, property law, immigration, employment law, and family law.