Your executor is the person who ensures that your wishes, as laid out in your will, are carried out. Naturally, finding the right person is critical to any good estate plan.
An executor’s obligations can include everything from arranging your funeral and making sure your dependants or pets are looked after, to filing tax returns and administering assets as set out in your will.
So, who should be the executor of your will? Here’s a checklist of key issues to consider:
Find someone trustworthy
This person will be making all the decisions you’re not around to make, so be certain you can trust them. They should act solely on your behalf and not gain any personal benefit from their decisions.
Choose someone who is capable of carrying out the tasks
Being an executor of a will requires a lot of record keeping and correspondence: this includes informing financial institutions and utilities of the deceased’s death, and keeping track of where all assets are and what they’re worth.
You want someone who is willing to reach out to professionals, such as lawyers, accountants, financial planners and corporate trustees, for help. Some people think they’re required to do everything themselves, but that’s not advisable. They could be held liable if they do things incorrectly.
Are they willing to do the work?
When choosing an executor, you might think of naming a family member because they’re an accountant with the right skill set, but what if they’re too busy? Being the executor of a will requires a significant time commitment, so anyone you choose should have the free hours necessary to dedicate to the job. It could take at least a few months to complete, or even several years, if the will is contested.
Nobody likes surprises, so be sure to speak to your chosen executor in advance to make sure they agree to it. It also pays to introduce your executor to your lawyer, financial planner and accountant, so they will be more comfortable approaching them later for help, if necessary.
Look within your province
Non-residents of Canada will likely not be accepted by the court as an executor of a will, and even if they are, it creates an extra layer of complexity, with additional tax-filing requirements. Similarly, avoid choosing an executor who is a U.S. citizen living in Canada, as they may also need to file extra tax returns.
Executors who live out of province could find it logistically impossible to carry out their necessary tasks. Choosing an executor within your own province will help the process go more smoothly.
Insist on impartiality
Potential conflicts of interest should impact your decision on who should be the executor of your will. For example, you might be trying to decide between appointing a new spouse or a child from a first marriage, but with blended families, neither is a good choice because the parties have conflicting interests.
Similarly, some business owners want to name their partner as executor of their will, but since they would likely end up negotiating with the deceased partner’s spouse over the sale of the business’s shares, being an executor would put the partner in an impossible position.
Choose someone likely to survive you
When looking for someone who can be the executor of your will, you need to be sure they’ll still be around after you die. A business partner or old friend may well pass away before you do.
In a similar vein, it’s important to reassess your choice of executor regularly, to make sure they’re still alive, and willing and able to be your executor.
Think about hiring a professional executor
If you have a complicated estate or don’t want to burden surviving family members with extra responsibilities, you could consider hiring a professional executor, such as a corporate trustee. These have the experience and ability to oversee the administration of your estate.
When looking for a professional executor, research the company’s fee structure, the services they provide and what experience they have of overseeing estates. This may cost your estate some money, but the fees are small compared to the potential losses if mistakes are made.
Two executors may be better than one
It can often be ideal to appoint a professional executor alongside a family member. You combine the trust you’ll get from a family member with the experience and ability of the professional executor.
A professional executor can also ensure that your family member doesn’t make any expensive mistakes or act in a way that goes against your will. It often also makes sense to name a back-up executor in case your first choice is unable to do it.
Get expert estate-planning advice
Choosing an executor and making a will are just two pieces of the puzzle when creating your estate plan. Your IG advisor can recommend ways to maximize your estate’s value, minimize tax obligations and help ensure that your loved ones receive everything you want to leave for them.
Talk to your IG advisor today to set up an estate planning meeting. If you don’t have an IG advisor, you can find one here.
Written and published by IG Wealth Management as a general source of information only. Not intended as a solicitation to buy or sell specific investments, or to provide tax, legal or investment advice. Seek advice on your specific circumstances from an IG Wealth Management Consultant.