10 tips to help you get started as an executor

Serving as an executor can be a lot more challenging than is initially expected. People often underestimate the amount of work that goes into the role. This article will provide executors with helpful tips for carrying out their obligations successfully.

1. Understand an executor’s duties

The executor of an estate is the representative of the estate of a deceased person. Being an executor can be difficult, time-consuming and stressful. The executor is responsible for everything from obtaining a copy of the Will to communicating with the beneficiaries and creditors. Executors are required to review insurance coverage, close financial accounts, pay debts, taxes and fees and distribute assets to the beneficiaries. It is important that for appointees to educate themselves about what is involved before taking on the role, in order to ensure that they are comfortable with everything that is required.

2. Locate important documents

One of the first obligations that an executor has is to locate and read the original and most recent Will of the deceased. In an ideal situation, the testator will have informed the executor as to the location of the Will and other important documents. If this has not been done, the executor will have to conduct a search for the Will. The executor should also obtain the death certificate of the testator.

3. Communicate

Settling an estate can often create tension amongst family members. Executors will be required to speak regularly with beneficiaries and family members to ensure that they understand the process and balance any potential conflicts of interest. It is important to be as transparent as possible and keep the lines of communication open. Family members should be told what actions are being taken to settle and distribute the estate, and what their interests are in the estate.

4. Carry out the Will as it is written

It is crucial that the executor abide by the terms of the Will. While this may seem obvious, sometimes executors may feel tempted to change an unpopular part of the Will in favour of what they believe to be fair or efficient. At other times, family members or beneficiaries of the Will may encourage the executor to alter a certain provision in their favour. It is important to remember that the executor’s role is to distribute the estate as it was set out in the Will, and not amend the Will to suit anyone else’s interests.

5. Pay debts and taxes before paying beneficiaries

One of the most important responsibilities of an executor is paying off any outstanding debts, taxes and fees. Sometimes, executors feel pressure by family members and/or beneficiaries of the will to administer their interests right away, but if an executor pays a beneficiary before clearing all liabilities, they may be held personally responsible for doing so.

It is best practice to obtain a clearance certificate from Canada Revenue Agency which indicates that any taxes owing, interests and penalties have been paid by the estate. Executors who fail to obtain a clearance certificate may be held liable for paying any outstanding taxes.

6. Take your time – within reason

Administering an estate is time consuming. It may take a year, and could stretch out longer depending on the complexity of the estate. An executor must strike the correct balance between ensuring that they take the time to understand the issues involved in the administration of the estate, while keeping estate settlement moving forward.

7. Maintain records

Keeping good records is crucial. If beneficiaries have questions, the executor must be able to back up and support their decisions with the correct documentation. Since the executor is accountable to the beneficiaries for the assets of the deceased, it is vital that accurate records are maintained when dealing with the distribution of the estate, as well as records of all debts, expenses and taxes.

8. Seek professional advice

Once you obtain the necessary documents, an executor will have a better understanding of just how complicated administering an estate may be. At this point, they may wish to seek advice from professionals whose expertise will prevent costly mistakes. Executor duties often require consulting many professionals, including lawyers and accountants.  In most cases, it is not appropriate to undertake the process of estate administration without the involvement of professionals.

9. Delegate where appropriate

An executor is not obliged to do everything personally. Executors are entitled to outsource some or all of the necessary tasks of estate administration. It is expected and encouraged that executors seek advice from professionals and other advisors. Delegation should be limited to appropriate tasks.

10. Protect yourself

Executors have a number of different responsibilities when managing the distribution of an estate. For peace of mind, there are two principle ways in executors can protect themselves from personal liabilities:

  • Executor Insurance: executor insurance will protect trustees who face any legal issues relating to decisions made in the course of estate administration.
  • Obtain Releases: Releases operate to discharge an executor from personal liability. The release should contain an acknowledgment that the beneficiaries received a full and adequate accounting of the administration of the estate and are satisfied.

For further information, or assistance with estate administration, please consult a TEP.

Disclaimer

An article of this kind can never provide a complete guide to the law in these areas, which may be subject to change from time to time. The opinions and suggestions made within this article should not be interpreted as specific advice in relation to any particular individual or individuals. Neither STEP, the article author or their firm accept responsibility for any loss occasioned by someone acting or refraining to act on the basis of the opinions and suggestions contained in this article. More