After you have completed the crucial task of creating your estate plan, you need to select someone to serve as the executor of your Will. Who should you choose to fulfill this important responsibility and what will be their duties?
The Role of an Executor
The person you name in your Will to handle your assets after you pass away is called an executor. The executor is responsible for managing and distributing your assets and must always act in your best interest. They must follow the instructions in your Will, avoid conflicts of interest, and protect the interests of the beneficiaries.
Your executor is not responsible for deciding who will receive your assets. Instead, they must follow the instructions in your Will and act according to your wishes. Think of your Will as a "playbook" that guides the executor's actions.
Duties of an Executor
Probate the Estate
Obtaining a Certificate of Appointment of Estate Trustee (commonly known as “Probate Certificate”) is the process of securing approval from the Court for the person entitled to administer the estate of a deceased individual. The executor will need to file the original Will in the probate court in the county where the deceased was last residing. Most importantly, the original Will must be located, as only the original copy can be offered and admitted for probate.
Prior to Appointment
When a person passes away, the executor has the crucial responsibility of identifying, locating, and securing the deceased's assets such as bank accounts, investments, real estate, and personal property. Additionally, the executor needs to determine any outstanding debts and liabilities.
Furthermore, prior to obtaining the Probate Certificate from the court, the executor is entrusted with safeguarding the assets of the estate. For instance, if the deceased owned a primary residence, the executor must ensure that the property is well-maintained, including tasks such as paying utility bills, maintaining property insurance, and preparing the property for the winter season.
To prevent any unauthorized transactions or payments after the individual's passing, the executor is required to notify banks, credit card companies, and government agencies of the death of the deceased individual. This should include notifying all relevant institutions to ensure the cessation of financial transactions and the proper handling of the deceased's affairs.
Following the Appointment of Executor
After the Probate Certificate is issued, the executor has the power to act as the representative of the estate. The executor must:
Open an Estate Bank Account: The executor needs to open a bank account in the estate’s name to transfer any money or liquid assets of the deceased. This account will hold funds for expenses such as funeral costs, mortgage payments, home insurance, and legal fees. After settling these expenses, the remaining money will be used to pay the beneficiaries or next of kin as stated in the Will.
Pay Off Creditors: The deceased’s debts and liabilities must be paid before any beneficiaries can receive their inheritance. Valid creditors must be paid after the administrative fees are settled.
Manage Estate Assets: The executor is responsible for understanding the value and nature of the deceased’s property to ensure fair distribution of the assets. This may involve selling the deceased’s property to cover estate-related expenses. Once the assets are settled, distribution can occur.
Distribute the Assets: After paying administrative fees and valid debts, the remaining amount is available for distribution to the beneficiaries. The executor must identify and locate the named beneficiaries and inform them of the remaining amount and the expenses incurred.
Executors also need to consider filing the deceased’s final income tax return, dealing with a business owned by the deceased, or contesting creditor claims against the estate. Every probate is different, and each executor has various duties.
With this in mind, how do you determine the right person for this role?
Choosing Your Executor
Given the responsibilities and obligations of an executor, as detailed above, choosing the right person to handle your estate is crucial. There are no restrictions on who can be chosen, but it is important to choose someone who you believe to be honest, responsible, and organized. When making this choice, you should consider:
Family Relations: Oftentimes, your next-of-kin is in the best position to serve as they are likely aware of the nature and location of your assets. But consider the impact your selection will have on your family. For example, if your next-of-kin is estranged, the appointment of one child over another may promote conflict in the administration of the estate.
Professional Experience: If you have a family member or close friend who has experience with probating estate or has financial experience, it may be wise to appoint them to manage your estate to alleviate the learning curve for an inexperienced choice.
Geographic Location: Appointing an executor who resides outside of the Province may create difficulties and undue delays for the administration as the Province domicile of the deceased is where the probate will occur. Further, if the deceased owns the property, managing and selling the property can be difficult if the executor is operating from a distance.
Age: You should consider an individual whom you expect will outlive you. You’ll also want to consider the age and maturity of the individual as they will be required to handle the responsibilities described above.
Corporate Fiduciary: In the event your options are limited, the use of a third-party corporate executor is available. Such executors would require compensation for their services. They are trained to handle the various complexities of managing estates.
Regardless of who is chosen, an executor is, if needed, required to enlist the assistance of necessary professionals, such as lawyers, realtors, accountants, and wealth management professionals. This guidance, in conjunction with the directives of your Will, ensures the proper administration of your estate.
In sum, creating an estate plan that fits your needs is the foundation for a straightforward probate of your estate. With a plan in place and the right individuals selected to represent you, you can rest assured your wishes will be carried out.
Disclaimer
The information in this post is provided for general informational purposes only and may not reflect the current law in your jurisdiction. No information contained in this post should be construed as legal advice from our firm or the individual author, nor is it intended to be a substitute for legal counsel on any subject matter. No reader of this post should act or refrain from acting on the basis of any information included in, or accessible through, this post without seeking the appropriate legal or other professional advice on the particular facts and circumstances at issue from a lawyer licensed in the recipient’s state, country or other appropriate licensing jurisdiction.