Who Should You Select to Be Your Executor?
By John M. Macaulay - Published on Monday, 29 June 2009 12:04
Most of us understand the importance of having an up to date estate plan, including a will and power of attorney but have we given enough thought about who we will have as our representative on earth after we pass on? Choose carefully!
Can the person really do the important job of looking after your affairs? Do they have the time or ability to navigate through the often complicated waters of estate administration? Do they understand what it means to undertake such a task? On the other hand will they even accept the difficult task ahead of them?
What is expected of the executor?
Naturally they are the ones who arrange and have responsibility for the funeral. This is why so many people nowadays opt to pre-plan and pre-pay for the funeral. Make sure that your executor knows where your latest will is located in case there are special issues needing immediate attention.
After the funeral there is the urgent matter of determining the terms of the will and communicating them to the beneficiaries, not to mention actually locating the possibly numerous beneficiaries mentioned in the will. The location and value of your assets and debts is crucial to the proper estate administration. At this point in the estate administration it is important to be sure that you have the assistance of a professional, usually but not necessarily, a lawyer.
Your debts must be paid and any ongoing expenses attended to. If you have insurance policies, pension plans or other investments, claims must be filled out and submitted, bank accounts closed and an estate account established. There is ALWAYS the issue of Canada Revenue Agency and ensuring that your taxes have been paid, not only for the year of death but for all previous years and on behalf of the estate if there is tax owing for any income earned after death.
How much work the estate trustee must do is largely dependant on the nature and extent of the assets held in your estate at death. It is not uncommon for the estate trustee to have to apply to the estates court to obtain letters probate, now called an "application for a certificate of appointment of an estate trustee with (or without) a will". Most often, no matter how experienced the estate trustee, they will be required to hire a lawyer experienced in this area of the law to assist them in fulfilling their legal obligations to the estate and the beneficiaries.
So, who do I choose?
In addition to the abilities of the estate trustee to get along with the beneficiaries and be fair with each one of them, sometimes under difficult circumstances, the estate trustee should have good business skills and a lot of common sense.
It is generally inappropriate to select your parents to be your estate trustees for obvious reasons. Choosing your brother who lives in Los Angeles is also problematic. If you appoint one of your children but leave another out you might be creating an unintended family feud. Although the more estate trustees there are the more cumbersome the estate administration, sometimes it is necessary to chose more than one person to represent you after death. Sometimes it is advisable to choose a professional who knows about estate administration and be less emotionally involved.
Examples like these are really too numerous to mention but rest assured that this is one of the most important decisions which you will have to make in preparing your will. A lawyer who is well versed in estate planning should be able to assist you in this important task.
The duties of the executor are complicated, even in the simplest of estates, and executors are entitled to be compensated for their services. There is no fixed amount but it is typical for compensation to be approximately 4-5% of the value of the estate. You can actually set out the amount of compensation to be paid right in your will. Be careful however, to not set the amount too low as you might find that no one would take on the job.
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