One of the most important decisions to make when preparing a Will is choosing an executor (referred to in Quebec as a liquidator and in Ontario as an Estate Trustee), i.e., the person charged with administering an estate and carrying out the final requests of a deceased individual. Appointing the right executor ensures a quick and accurate distribution of an estate, while minimizing animosity among beneficiaries and estate liabilities.
Duties of an executor
The duties of an executor are plentiful and include the following.
Immediately after death
- Determine whether deceased left a Will
- Make funeral arrangements
- Open a bank account for the estate
- Notify beneficiaries of their interest in the estate
- Cancel health insurance, driver’s license, credit cards
- Pay outstanding debts and taxes of the deceased
- Secure estate assets (ensure proper insurance)
- Prepare an inventory of assets including real estate, bank accounts, life insurance, investments, and personal property
- Arrange for valuation of assets
- Assess the rights of the surviving spouse (if any) under provincial law
- Assess the rights of any dependents who were financially dependent on the deceased
- Pay any outstanding debts and taxes of the deceased
- File a T-3 income tax return
- Obtain a clearance certificate from Canada Revenue Agency
- Arrange for transfer of real property
- Dispose or distribute personal effects in accordance with the Will
- Distribute the remainder of the estate as indicated in the Will
- Close estate account
Who can be an executor?
Generally, anyone over the age of 18 who is mentally competent can act as the executor of a Will. The person named as an executor may also be a beneficiary of the Will. When choosing an executor:
1. Consider naming more than one executor
Multiple individuals (or co-executors) may be appointed to share the burden of administering an estate. One pitfall of this approach is that naming multiple individuals can make decision-making more difficult. If the Will is silent about decision-making, then unanimous consent will be required. However, this may still be the correct approach, and a Will can always provide for a tie-breaker if executors disagree on a decision.
2. Name a back-up executor
It is important to appoint an alternate executor or executors in the event that the primary executor is unable or unwilling to fulfil their role. Accordingly, Wills should list both primary and alternate executors in order of preference.
3. Consider the residency of your executor(s)
In addition to the practical difficulties of overseas estate administration, naming an executor who resides in a foreign jurisdiction will cause complications for post-death estate planning. For example, naming a foreign executor could change the tax residency of the estate or prevent the executor from being entitled to make trading decisions on certain investment accounts. There may also be bonding requirements for a foreign executor.
4. Consider naming an estate professional as an executor
Generally, people appoint family members or close friends to be the executor(s) of their Wills. However, in situations where there is a complex estate, or acrimony among beneficiaries, dependents or family members, it may be appropriate to consider appointing an estate professional as an executor. Estate professionals who provide these services include trust companies, lawyers, and accountants.
Who should I choose as executor of my Will?
The executor is tasked with the responsibility of administering an estate in accordance with a Will. The executor should be someone who:
- The testator trusts to administer their affairs in accordance with their wishes;
- Lives within reasonable proximity of the testator so that it is easier to deal with the deceased’s family and assets;
- Has a degree of knowledge pertaining to the complexities involved in the testators tax filings, investments and financial decision-making;
- Is driven and able to get things done promptly; and
- Is likely to survive the testator’s death.
These responsibilities should be assigned to someone who is aware that the duties of an executor are both time-consuming and stressful. In some provinces, once an individual begins the process of dealing with estate assets, they are legally bound to see the administration of the estate to its end, unless relieved of their duties by a court order.
How do I appoint an executor?
The best practice is to first have a discussion with a chosen executor prior to naming them in a Will. If they are amenable to the role, they may be appointed as executor in the Will. Their contact information should be included in the Will, or given to a trusted advisor who holds the Will and will contact the executor.
For additional information or assistance with appointing an executor of your Will, please consult a TEP.