The process of estate planning involves several crucial decisions. Clearly, one of the most important is choosing the right executor of a will. This person or institution will be responsible for managing your estate after you pass away, ensuring that your assets are distributed according to your wishes. But who is best suited for this important role? Let's delve into this topic and explore the key factors to consider when selecting an executor of a will.
Understanding the Role of an Executor
Before we discuss who should be appointed as an executor, it's essential to understand what characteristics of the executor this role entails. The executor of a will is responsible for settling the deceased's estate, which includes tasks such as paying off debts and taxes, managing assets, and distributing the remaining property as specified in the will. This role requires time, patience, and meticulous attention to detail.
Traits of an Ideal Executor
When choosing an executor for your will, it's crucial to select someone trustworthy and reliable. Here are some traits that make someone a good candidate:
- Organizational Skills: The executor must handle various tasks simultaneously – from contacting beneficiaries to filing tax returns – requiring excellent organizational skills.
Financial Acumen: A basic understanding of financial matters can be beneficial since the executor may need to manage investments or real estate until they can be distributed to beneficiaries or assigned trustees.
Integrity: Given that they'll have access to all your assets, it's crucial that the person you choose has high moral standards.
Availability: The process can take up to a year or more; therefore, it's essential that your chosen executor has enough time available. Even a simple estate settlement and distribution can envelope hundreds of hours of an executor's time and focus that could stretch over multiple years.
Financial Willingness: Lastly, ensure that the person you select is financially willing to take on this responsibility. An executor could spend hundreds of hours of their time performing or overseeing the process; can they afford to do so?
Who Can Be Your Executor?
Now let’s look at some potential candidates who could serve as your executor:
Family Members: Often people choose their spouse or adult children as executors due to their familiarity with their financial affairs and personal wishes of the testator.
Friends: A close friend can also be a good choice if they possess all necessary traits and are willing to take on this responsibility.
Professionals: If your estate is complex or if there’s potential for family conflict, you might consider hiring a professional like an attorney or accountant or specialty services that has experience in estate administration, distribution and final settlement.
Financial Institutions: Some banks or trust companies offer estate management services and they can act as executors; however, they usually charge fees based on the value of the estate and refuse to be anything other than holders of assets for the legal firm appointed to authorize distribution of estate proceeds.
Considerations When Choosing an Executor
While choosing an executor for your will is deeply personal and depends on individual circumstances, here are some considerations:
Age & Health: Choose an executor as someone who is likely to outlive you and has good health so they can fulfill their duties when called upon. Make sure you have an alternate executor or executor service to use if the primary executor voice is unable or unwilling to take on this crucial role.
Administration and logistics: An executor living nearby or residing in the same province can make things easier since many tasks require physical presence like sorting through personal belongings or selling real property. The will itself should have language that allows the executor to hire both local and out-of-province professional assistance to help administer the probate, final tax return, real estate, registry services and the like.
Relationship Dynamics: Consider how family dynamics might affect the execution process; appointing one child over another could lead to disputes among siblings. Appointing shared responsibilities of co-executorship between family or others means they each will need to be able to work seamlessly together when performing their shared tasks and responsibilities.
Remuneration: Acting as an executor can be time-consuming; consider whether you want to compensate them for their efforts from your estate’s funds. These executor compensations may be taxable to the executor, it is a form of taxable income for the official role they are to perform for the estate. Carefully consider how to manage the wording of any compensation offered in the will, make it specific to the role the executor is charged to perform and what asset is bequeathed as simply the result of their beneficiary status, if any.
Organize in Advance: Regular maintenance of an estate file and the supporting documentation is key to how well the executor is able to fulfill your wishes. Secure and flexible access to funds and careful organization of any details of the testator’s day to day life makes the burden lighter to the executor to make contact with external parties, government bodies, financial service providers, social media accounts, subscription services and utilities providers for proper notification.
Emotional Strength: It is hard to be grieving and still be the person responsible for getting things done. It takes both an emotional and physical toll on most executors who are closest to the deceased. Make sure they have resources for emotional support through what can be a very traumatic time in their lives.
Pre-paid Arrangements: Any pre-arranged or pre-paid expenses should be carefully noted and the executor should be informed of these arrangements when they are being asked to take on this role. They should also be informed of any changes to those pre-arrangements or prepaid expenses if they change over time.
Please discuss with us how we can assist you and your executor or trustee organize and maintain details pertinent to your estate needs. https://planmyestate.ca Just book Barb for a brief chat or online meeting here: Barb Mackay - Plan My Estate | Canadian Estate Planning Guide
Choosing the right executor for your will ensures that your final wishes are carried out smoothly and efficiently after you're gone. It's not a decision that should be taken lightly but with careful consideration about who would best fulfill these duties based on trustworthiness, capability, willingness, and availability.
Remember: once you've made up your mind about appointing someone as an executor of a will - communicate with them about it! Make sure they're aware of what being an 'executor' entails before officially naming them in your legal documents.
Selecting an appropriate executor plays a pivotal role in effective estate planning - so choose wisely!