There is a good chance that at some point, you will be asked to be an executor to someone’s estate – if you haven’t been asked already. The request may come from a spouse, a parent or a close friend, and you may be well inclined to accept. This article will give you the basics on deciding whether you should or shouldn’t.
First, some definitions, since I for one didn’t hear any of this estate stuff until I was in my late twenties. This probably reflects the general unease most of us feel in our culture about death in our families and so we don’t talk about it that much. An executor is the person who carries out the winding up activities of the deceased person following the instruction of the Will or the provincial court. The estate consists of the assets that the deceased person has when they die. The Will tells the executor what to do with the assets. When someone dies without a Will they are said to have died intestate.
The truth is, settling an estate can be a very complicated and time-consuming process, taking on average 18 months. This all may be going on as you, and others close to you, are mourning and possibly on edge. The next time someone asks me to be their executor, I will gently and respectfully ask, “Do you have a comprehensive and up-to-date Will that you have discussed with the family?” I would be reluctant until that was in place and all the documents were collected and in a secure and known location.
I believe that everyone should have a Will. It isn’t so much about you (you aren’t around anymore), as it is about getting your assets to the right people/charity, in the most tax-efficient manner in the timeliest way while maintaining harmonious relationships with all the survivors. It could be a mistake to think that you don’t need a Will because you assume that your estate will all just go tax deferred to your spouse. It might or might not, but the complication and delay could cause significant financial and emotional problems for those on this side of the grass. It might also result in more taxes and fees to be paid as well.
If you’re considering, or have accepted, a request to be an executor for someone’s estate, there are some important considerations to bear in mind.
Executor duties are significant
Whether it’s collecting life insurance, applying for death benefits, filing a tax return or making a probate application, the range and complexity of executor responsibilities can be a second job and carry liability for accuracy as well.
Estates can take a while to settle
Depending on the size and complexity of the estate, it can take anywhere from an average of 18 months, to up to four years.
You may be working through your own grief and sorrow
Dealing with the death of a loved one is often very difficult, and the added demands of settling that person’s estate can aggravate your vulnerability, especially if there is tension over an unequal Will or difficult family dynamics. Be sure to ask yourself how well you think you will be able to carry out your duties, whether you are mourning or not. Don’t be afraid to raise your concerns with the person who has asked you to be their executor. A frank and open discussion is required before agreeing to take on such a task. The first time I was asked, I was flattered and honoured, as you should be, since it indicates a high level of respect and admiration for your sense of fairness, loyalty and commitment.
You can seek help
Most of us have little experience in this specialized field, so it is quite natural to be unsure about the request to be an executor.
If you feel uneasy about being named an executor or you don’t think you will be able to handle the responsibility effectively, you have options. Trust companies, lawyers, and accountants are all qualified candidates to be an executor or to help you as needed. Depending on the complexity of the estate and executor services provided, the cost is usually 3-5% of the estate value. These professionals can be invaluable if you feel that you want to say yes, but really wonder about your ability when the time comes. If when you are called upon to act, your own situation (health, living a long way apart from the deceased, etc.) may make it in everyone’s best interest that you decline becoming the executor. Therefore, it is a good idea to have an alternate executor in the Will for just such a situation.
This discussion about executors is just part of the whole Will and Estate planning process. In my financial advocacy practice, it is part of the program to discuss the estate, along with tax, insurance and investments to deal with the issues of financial planning in an all-inclusive manner, aiming for the best possible financial structure for each client. By having these discussions, clients and I are better prepared for discussions with the professional advisors in accounting and law. I have an excellent Will planning guide that I am happy to send out on request. This guide will help you consider your particular circumstance in conjunction with the conjunction with the laws of BC and Canada and prepare you for a meeting with your estate lawyer.