Being named Executor (in Ontario, an Executor is called an estate trustee with a will) by a family member or friend is considered an honour. For those who have acted in this capacity it can be time consuming, daunting and emotional…
As an Executor you are responsible for following through with the last wishes of someone dear. Your responsibilities include communicating these final wishes to family and beneficiaries who are grieving, all while most likely grieving yourself. The settling of an Estate can be complicated and overwhelming, while requiring a great deal of time and attention to detail. Not only are you responsible for a lengthy list of tasks, but you are also personally liable for your responsibilities of the Executor role.
Typical duties include:
- Locating the will, arranging the funeral etc.
- Locating and preparing inventory of the estate and valuating the estate.
- Applying for the CPP death benefit, dealing with government pensions/benefits, employment benefits and company pensions.
- Find and review claims for life insurance and pension benefits.
- Safe guarding the estate assets (including digital assets and social media accounts) Dealing with any residences or other properties, reviewing insurance coverage for any assets. Potentially emptying, cleaning and preparing properties for sale.
- File tax returns on behalf of the deceased and the estate including obtaining tax clearance certificate.
- Notifying banks and institutions where the deceased held accounts.
- Canceling driver’s licenses, passports, health cards, insurance, utilities etc.
- Dealing with beneficiaries and distributing the estate, providing regular updates to beneficiaries regarding the status of the administration.
These “typical duties” only include some of the responsibilities. Factor in complexities such as blended families, secondary marriages, business interests, family dynamics and you can be headed for one wild ride in your executor seat, make sure you buckle up!
As Executor you are eligible (but not required) to compensation for taking on this responsibility and rightfully so with the effort you will be investing in settling an estate. But, keep in mind it is taxable as income from employment and subject to applicable payroll deductions such as CPP and can potentially impact government benefits you may be receiving, such as Old Age Security (OAS).
Now, how do you choose the right Executor for your estate?? Think of someone who will be emotionally prepared to deal with your relatives and beneficiaries objectively. Someone experienced in dealing with lawyers, accountants, financial institutions. Someone who has the time to allocate to settling your estate, preferable in close proximity to the jurisdiction of your estate. We always recommend having an open discussion with your Executor of choice, while surprises can be nice we have yet to come across anyone who found it a pleasant surprise unknowingly being named Executor. Always name a substitute in the event of your primary choice being unable or unwilling to act. Naming a substitute can avoid the necessity of a court application should your primary be unable to act.
Here’s a link to an honest article by David Chilton, The Wealthy Barber, with his insight on acting as Executor. https://www.rbcwealthmanagement.com/ca/en/research-insights/why-the-wealthy-barber-wont-act-as-executor-for-even-his-closest-friends/detail/
There is always help available! You can always consider a corporate executor, such as trust company, who exist to fulfill these duties in an unbiased and professional manner.
Feel free to contact us for additional information, we are always here to help!