Is More Than One Head Always Better? The Problem With Appointing Co-Executors.
See Holt v. Holt, 1190025 (Ala. 2020).
Pillow fights are common between siblings when they are young and usually have little to no risk of serious injury. However, what happens when the siblings are adults, there is a substantial sum of money at stake, and their only options are to hire an attorney or fight "unarmed" in court? In June of 2008, Michael and Jere Holt were appointed co-executors of their late mother’s estate after jointly petitioning the Walker County Probate Court to probate the decedent’s will. Fast-forward 8 years to August 2016 when Jere petitioned the Walker Circuit Court to ultimately assume jurisdiction over the proceedings pursuant to Al. Code §12-11-41, while separately moving for permission to sell remaining assets of the estate to satisfy a cash bequest to himself. Michael opposed the motion and lost, leading to Michael filing a notice of appeal with the Supreme Court of Alabama, and resulting in the current decision, dismissing the appeal in its entirety.
In the underlying proceeding, Michael claimed Jere’s bequest had adeemed, referring to the doctrine of ademption. Generally, ademption applies to specific bequests that fail because the specific property mentioned is no longer part of the estate. However, gifts of a specified amount of money are typically considered general bequests and therefore would not be subject to ademption. Rather, a general bequest of cash to a beneficiary will require the executor to liquidate assets just to satisfy the bequest if there is insufficient cash in the estate, as happened here. All of this may occur and oftentimes will occur despite the likelihood of the testator’s original intent for the assets to be distributed as residuary bequests and for the benefit of other parties.
These are only surface level issues that the Court’s decision mentions but does not address due to its order of dismissal. The Court's dismissal is based upon an error either by the parties or by the circuit court which was addressed in Nelson v. Nelson, 10 So. 3d 603 (Ala. Civ. App. 2008). In that case, as well as here, the circuit court never obtained subject matter jurisdiction because it did not enter the order removing the case as required by the statute. This begs the question of whether either party was represented by an attorney throughout these proceedings. While it is not clear from the limited record readily available, had an attorney been hired by either side, in combination with the issue of subject matter jurisdiction being the grounds for dismissal, may support an action for legal malpractice against the attorneys. Conversely, in the event attorneys were not hired by either side, could this outcome have been avoided with an attorney’s help?
Lastly, and potentially most concerning for the average testator and beneficiary, who pays for the expenses of the coexecutors? Alabama law, like many other jurisdictions, allows an executor to be compensated from the estate. (Al. Code §43-2-682) The same statutory provision allows attorney fees to be paid out of the estate, which begs the question, were the estate’s assets effectively squandered by financing both sides of this action? Under Al. Code §43-2-833, an executor is deemed a fiduciary, and as such owes heightened duties to other parties involved in the administration of the estate. The same section confers a duty to settle and distribute the assets of the estate "as effectively and efficiently as is consistent with the best interests of the estate." So hypothetically, either party can be accused of breaching fiduciary duties, but could both be held responsible for diminishing the estate?