Testament and Executor: The Testators Manager?

Servant of the deceased

According to Art. 517 para. 1 of the Swiss Civil Code (CC), the testator has the option during his or her lifetime to appoint one or more persons capable of acting to execute his or her will in a testamentary disposition or contract of inheritance.

The executor sits at the center of legal relationships. He is primarily bound by the will of the deceased, but is also responsible to living persons, first and foremost the heirs, legatees, and creditors. The catalogue of duties in Art. 518 para. 2 CC includes the representation of the will of the deceased, the management of the legacy, the payment of the debts of the deceased, the administration of legacies and the division according to the instructions given by the deceased or according to the provisions of the law.

However, to call the executor a servant of the deceased is not entirely accurate. Thus, the executor cannot prevent the action for declaration of invalidity, nor can he order the division against the will of the heirs. Indeed, he is even obliged to notify the disadvantaged parties of violations against the statutory entitlement. Besides, only an appointed executor guarantees to a large extent the execution of the last will and testament, otherwise everything is up in the air!

Competences

The possible competences of the executor are far-reaching. Legal regulations are of a dispositive nature, i.e. the testator is largely free to decide which tasks he or she wishes to assign to the executor. If there are no corresponding provisions in the will, one speaks of a general execution. In this case, the executor has the right to perform all acts necessary to fulfil his or her duties. Although the executor’s mandate is in principle subject to the provisions of the mandate, the executor is exempt from the restrictions of Art. 396, para. 3 of the Swiss Code of Obligations. This means that he may conclude settlements and alienate or encumber land within the scope of his mandate. Unless otherwise provided for in the will, his competence extends to all domestic and foreign assets of the testator.

Although the testator is free to extend the competence temporally beyond the division of the estate or to reduce the substantive competence, he or she is nevertheless bound to a certain scope of action. The testator cannot exempt him from his general duties, authority supervision, civil liability or statutory division provisions. However, the right of authentic interpretation may be conferred on him by the heirs.

Control

Despite comprehensive powers, the executor is required to exercise his right with restraint under the principle of the gentle exercise of rights. Thus, he or she does not serve as a liquidator who is to sell and divide the estate as quickly as possible but has to preserve the inheritance and distribute it in kind as best as possible.

Like the liquidator of the estate, the executor is also subject to the supervision of the authorities and the right of appeal of the heirs. However, he is not bound by instructions vis-à-vis the heirs. Recently, the Federal Supreme Court ruled that a successful action for declaration of invalidity by an heir affects the entire activity of the executor. Consequently, the executor can be removed from office by one person without involving the co-heirs. The executor’s mandate thus ceases to exist for the entire estate and is not continued for those heirs who are satisfied with the executor.

Manager

However, all this does not stand in the way of the executor’s “management duties”. The executor’s service to the testator’s will consists in the fact that he will administer legacies, propose a division which follows the valid instructions of the testator and that he will arrange what is necessary for a smooth and quick enforcement of conditions, i.e. he will coordinate all matters of the inheritance.

As we have seen, the executor stands between parties. Between the heirs and the testator on one part and between the heirs themselves on the other part. He could be described as a fighter between “life and death”, which is not easy for the person concerned and requires a watchful eye, an intelligent way of acting and also psychological empathy.

Qualification of the executor

Every testator is therefore well advised to appoint a competent and legally skilled, stable personality for the office of executor, who operates from neutral ground from the outset and always remains there. Good friends are quickly overwhelmed with well-intentioned mandates or get lost in the close network of relationships of the heirs.

An executor mandate does not necessarily have to be handed over to a lawyer but can be entrusted to any person capable of acting. However, in the interplay of the testamentary disposition and the various parties and their legal representatives, the expertise of a specialised lawyer is thoroughly recommendable and has a further advantage if he has already drawn up the marriage contract, the contract of inheritance or the will.

In view of the fact that the activity of the executor has to be recompensed, many people dispense with his services and trust in the common sense and morals of the bereaved. Unfortunately, it has proven true in many inheritance cases that these all too often take a back seat to the material interests of the heirs. The costs of the executor would have been a good investment compared to the trouble, legal costs, etc., which arise when the legal possibilities are not authoritatively utilised on the part of the executor.

The case

A., testator and former owner of an old building with workshops on a 2000 m² plot in the building zone, has a daughter and a son. In his will, he bequeaths to the two of them the property on which the son has taken over his father’s trade and lives in the adjoining house. The question quickly arises as to how they intend to divide the property. There is only the possibility that one heir takes over 1000 m² of building land and the other the remaining 1000 m² with the old, dilapidated building, because the son needs the workrooms. There is no agreement on the allocation. The community of heirs gets into a dispute that drags on for a decade. After A’s death, a prospective buyer would have acquired the entire property at a price per square meter of CHF 1,000.-, which would have resulted in a total sum of CHF 2,000,000.-. However, due to the inheritance dispute, the sale falls through.

Today, the price per square meter has dropped to CHF 350, the house is unused and ready for demolition. Through this dispute, which a neutral and competent executor would certainly have known how to end or prevent, the community of heirs has lost CHF 1,300,000.-.

How little of this would the daughter and son have had to spend on the help of the executor?

An executor is always a good investment, as long as he performs his duties dutifully and purposefully and has the necessary qualities. Besides, the appointment of an executor does not cost the testator a single franc. As in the private sector, good “management” is a guarantee for success. And the wealthy testator has truly earned it, even after his or her lifetime.