Disclaimer: This article is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Planning your estate involves many vital decisions, but few are as important as selecting your executor. Your executor is the person who is responsible for overseeing your estate, and in some cases dealing with your assets.
They must make sure that the will is executed correctly and do so in a timely fashion, which can be challenging if they are the executor for more than one person. The executor also needs to deal with legal matters such as taxes, liabilities, and debts.
Clearly, it is a heavy responsibility, so you want to select that person only after careful consideration.
To help you out with this process, we’ve compiled some tips on how to pick the right executor for your estate!
Do you have to choose an executor?
Short answer: no. A will is perfectly valid without one. However, should you? Unequivocally, yes!
Basically, without a will, no one can control your estate. Therefore, your beneficiaries would need to wait for the court to appoint an executor in the event that you do not name one. Whenever the court has to be involved, you are looking at added costs in terms of legal fees and time for your estate. Therefore, by not choosing an executor, you are causing your estate to lose unnecessary money in additional, and avoidable, legal fees because the court now has to appoint an executor.
What will your executor do?
The executor’s obligation is to the estate’s creditors and the beneficiaries. Let’s briefly discuss in broad strokes what an executor’s responsibilities are. An executor is responsible for:
- Making funeral arrangements
- Taking possession of your property and assets
- Determining the value and managing the distribution of those items according to your will
- Applying for probate
- Preparing an accounting of the estate assets
- Filing the tax returns and applying for the Certificate of Clearance
- Paying off any debts or taxes owed by your estate before distributing remaining assets
An executor must keep accurate and complete records and receipts to satisfy the court and the beneficiaries that it has fulfilled its responsibilities. An executor’s job is a massive undertaking and a significant time investment. Generally speaking, an executor will work on an estate for a minimum of 1-2 years following your death.
Who can be your executor?
In Ontario, executors must be at least 18 years of age and have the capacity to act.
That means that your executor does not need to be related to you, although they certainly can be. As well, your executor is not required to live in Ontario (or even Canada), although it is undoubtedly more straightforward if they do. Additionally, if the executor does not live in Ontario, then the Court will often require them to post an administration bond (which is equal to double the value of the assets of the estate). It can either be paid into court by the executor personally or obtained from an insurance company that issues policies for administration bonds.
You also can choose more than one executor – although you must make sure that your co-executors get along!They will have to make all decisions together and sign off on all estate documents together. If there is friction between your co-executors now, then the heavy responsibility of handling your estate will certainly not make that relationship smoother.
In addition to executors, you would be wise to name a backup executor. This executor will become the executor if your first choice is unable or unwilling to serve as executor for any reason (for example, if they pass away before you).
If there are no co-executors and the only named executor dies before your passing, then it would be up to the courts to name the executor – which could take extra time and will certainly cost your estate more money.
Choosing an Executor
Now that you know who can be an executor, there are some other considerations as to how to choose the one that is right for you.
The most important advice that we can give is to choose someone that you trust; implicitly and fully trust.
The person you select to be your executor will have a lot of leeway for your assets. For example, they can determine how much will go towards things like funeral costs and outstanding bills before being distributed among the beneficiaries of your estate.
That executor may also have some leeway in what happens with certain assets within the estate after death. For example, they might be able to make decisions about items not explicitly marked in your will.
It would be best if you were sure that you could trust this executor with all of your estate—and the life and future of whoever might inherit it.
Willing and Able
Being an executor is a significant responsibility and one that is time-consuming. Ensure that whoever you select as your executor has the time and energy to dedicate to completing all the tasks that are needed. If you have an executor in mind who doesn’t live near your estate or has too many other responsibilities, then it would be wise to select another executor.
Taking the time to find an executor capable of handling all tasks and making decisions will save headaches later on after death.
You may select a trustworthy executor; however, you may be putting them in a difficult situation by asking them to execute specific duties.
For example, you may name your new spouse as your executor. However, that might create conflict in blended families and cause friction with surviving children from a previous relationship.
Think carefully about who could be objective in carrying out your final wishes, especially if you have a complicated estate or family situation.
Naming Your Executor
Given the level of commitment required to being an executor of your estate, you will first want to ask the person you choose. That is not something that you want your executor to discover after you pass.
Next, make sure it is included in your current will and estate documentation.
Finally, give thought to whether that needs to change from time to time. That person may have been willing and able to at the time, but is that still true?
Additionally, certain life events should trigger you to consider whether a change is needed. Have you gotten remarried? Are your children now adults? Have you or your executor moved to a different province or country?
Have you obtained assets in a different country? Have you started a business that has begun to grow and find success? These are all times that should cause you to pause and consider whether a change in your executor is warranted.
The Beeksma Law Advantage
At Beeksma Law, we understand that thinking about the end of your life is not a pleasant task. However, the more planning you do today, the easier the process will be on your surviving family.
Our team looks at your life, family, and assets to help you arrange an estate plan that best serves you.
If you would like to speak more about your estate plan, then book a free consultation today. Our team would be happy to connect with you.