Being an executor of a will is like temporarily having a second job. It takes roughly 14 regular work weeks to settle an average estate.
The responsibility is not for the faint of heart.
It takes discipline, hard work, and honest dedication to settle an estate properly.
So, naturally, when choosing an executor of a will, the possibilities and lack of information often lead to overwhelm.
Jack and Jenny think Paul has the brains to deal with your large trust fund, but you think Penny has the heart. But what about... Angela? She "gets you" with no explanation needed – plus, she's got a good head on her shoulders.
You feel pressured, confused and you just want to make a decision. A decision that's respected, not challenged.
To do this, you'll want to first get informed on the duties of an executor. Secondly, you'll want to speak to a professional. And then, and only then, will you start having difficult conversations with your family.
Even in life's most stressful situations, knowledge is power. Taking the first step in choosing an executor to be included in your will rests upon being informed about the types of tasks that are common for an executor settling a trust or an estate. This cuts down feelings of fear and amps up feelings of confidence in your decision making.
What is an Executor of a Will?
Depending on where you live, there are other terms used for executors, including: estate representative, estate trustee, liquidator, and administrator.
What Powers Do You Give an Executor of a Will?
The Government of Canada indicates that some of the responsibilities of an executor may include:
Making funeral and burial arrangements
Locating the deceased’s final will
Paying estate fees
Locating and notifying all beneficiaries named in the will, or under the law if there is no will
Getting an appraisal for the value of the estate
Applying to have the will validated by a court (probate)
Completing a final tax return for the deceased, as well as any returns required for the estate
Putting a notice out for creditors notifying them that the person has died
Paying all debts owing by the deceased
Dividing the estate as outlined in the will (or legislation, if there is no will)
Providing financial information about the estate to the beneficiaries
Who Do You Choose?
Of course, it’s easiest to choose family but that’s not always the best choice. Start thinking about who could handle and thrive when carrying out the tasks above and ask yourself if the person in mind is:
Dedicated and dependable (you undeniably trust this person due to their good character and morals).
Honest and financially savvy (if you’re worried about this person stealing – they’re not the one to be handling your estate).
Patient and procedural (enough so that they can waver the storm of estate paperwork and processes).
2. Speak to an Estate Professional
Your estate could be a mountain of complex finances, or it could be simple with little to no debt or savings. Either way, you should consult with a legal advisor to assist in your estate planning process.
It would be a good idea to also consult with your financial institution or an estate planner to confirm whether they have any valuable information to assist in settling your estate.
Some examples of assets that you may have to discuss with a professional include your:
cash, or money in a bank account
real estate
registered plans, like RRSPs and TFSAs
investments, like stocks, bonds or mutual funds
personal items and keepsakes
Consider Hiring a Professional Executor
There are times when it may be wise to consider hiring a professional to settle your estate. You could choose a professional to act alone, or, otherwise, you could decide to appoint a professional to assist the executor(s) with the administrative duties of your estate. This is especially useful when:
You have different types of property (i.e. farm property, cottage, etc.)
A disabled child is involved
You have significant wealth
You have a trust fund set up
Your family has a history of feuds
There are many reasons to hire a professional; however, the most important thing to remember is that the person you choose doesn't have to know all the procedures associated with your estate, they just need to be ready to ask for help if they're unsure.
3. Speak to Your Family
Now it's time for the difficult conversations. You must ensure your family members are aware of the responsibilities, financial rewards, and possible financial implications of being the executor of your estate.
This is a "big ask" for most people. Be sure to discuss this with each individual so that they have the choice to either accept or deny your request.
It's important to make it known, as even if you name someone as an executor in your will, they have the option to deny the responsibility. If they do not accept the responsibility, it will be given to an alternate executor named in the will. If there are no alternate members, the responsibility will be determined based on provincial or territorial law.
Possible Financial Implications
An executor may also have to cover some of the expenses of settling the estate until they can be paid back from the estate. For example, they may have to cover real estate appraisals, probate fees or taxes.
It would help if you had this conversation with your chosen executor, as many people are not aware of the possible financial implications of this responsibility.
Payment to Executors
Although executors may have to pay some fees in advance, in Ontario, the law specifies that compensation should be "fair and reasonable for the care, pains and trouble, and the time expended in and about the estate". If you wish, you can also include a specific compensation amount in your will.
The Question is… Who Best Fits the Criteria to be Your Executor?
Arming yourself with knowledge is the first step to confidently choosing the right person that will continue to respect you and your wishes long after you're gone. Speaking to a professional will clear things up and confirm which path you should take. And talking to your family will assist in making your decision.
It's essential to make your decision based on all the information you've gathered and leave it at that. You will feel confident with your decision instead of worrying about how things will go after you're gone.
“It’s important to make a distinction between a decision problem and a “worry” problem. Being worried about whether it is going to rain in the afternoon, is a typical worry problem. There is nothing you can do about the weather. Hence there is no decision involved. We face a decision problem if we consider whether or not to take an umbrella with us to town.”
Solve this decision problem by taking the first step in your estate planning journey. Speak to an estate planning professional today.