Often when people select the ideal Executor (Executrix for female) for their Will, they base their decision on the relationship, trust, and the candidate’s financial literacy and willingness. For example, most spouses appoint each other and/or their adult child(ren) for the role.
Many people don’t know that the Executor’s location matters. From a practicality perspective, it’s much easier for him/her to administer the deceased’s estate if he/she is close-by.
There are other factors. It is challenging to act as an executor from a distance. There will probably be a number of occasions throughout the settlement process where the Executor’s physical presence will be required to complete certain tasks such as valuing estate assets or distributing them to the beneficiaries.
An Executor who lives in a different province or territory in Canada may be required to post an estate administration bond by the court to ensure he/she fulfills the duties. It is common that the bond is greater than the estate’s value. Can the Executor come up with the money? If the Executor lives in a different country, the deceased’s estate may be treated as a foreign estate and taxed unfavorably. If the Executor is a U.S. person, then Canadian investment firms aren’t permitted to accept investment instructions from this individual, based on the regulatory rules set out by the U.S. Securities Exchange Commission (SEC). Hence, it is best to choose someone who you trust and is of close proximity to you to perform the role.
What if you don’t have family members or close friends in your province or territory? In this case, you may want to consider a professional, such as a lawyer, accountant or trust company. You may hire them to act jointly and severally with your family and friend. Jointly and severally means the parties can act together or separately. Alternatively, you may want both parties to act jointly. It depends on your preference and situation.
Do your research. The fees and services are different. The existence and longevity also vary. Individual professionals will retire and pass away one day. A trust company will be around and offer continuity.
At RBC, the Royal Trust offers Executor and Power of Attorney services. The company was founded in 1899 and has been serving families and giving them a peace of mind for 125 years.
Should this topic appeal to you, please contact us to discuss more.