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As an estate lawyer, one of the most critical discussions I have with clients involves selecting the right executor (also known as an Estate Trustee in Ontario). This is a decision that should not be taken lightly. The executor is responsible for carrying out the terms of your will, ensuring your wishes are respected, and managing your estate in compliance with Ontario law. A carefully chosen executor can ensure the process is smooth and efficient, while a poor choice may lead to delays, disputes, or even legal challenges.
What does an Executor do?
Understanding the duties of an executor will help you make the right decision. The responsibilities of an executor are significant and include:
Locating and securing assets: The executor identifies and safeguards assets, including real estate, financial accounts, and personal belongings.
Paying debts and liabilities: They must notify creditors, settle outstanding debts, and pay any applicable taxes.
Distributing assets: After all liabilities are addressed, the executor distributes remaining assets as outlined in the will.
Managing legal and tax filings: An Executor files the deceased’s final tax return and obtains a clearance certificate from the Canada Revenue Agency.
These tasks demand time, attention to detail, and a combination of financial and administrative skills.
Considerations for Choosing an Executor
Selecting an estate executor is one of the most critical decisions in preparing a will. The right person can ensure your estate is efficiently administered. Take the time to carefully evaluate potential trustees against the following criteria:
Trustworthiness and Integrity
Trust is paramount when appointing an executor. This individual will have control over your assets and must act in the best interests of your beneficiaries. Choose someone with a strong track record of honesty, responsibility, and sound judgment.
Organizational Skills and Attention to Detail
The executor must manage numerous tasks, including inventorying assets, handling court paperwork, filing taxes, and maintaining meticulous records. Someone who is disorganized or overwhelmed by administrative duties may struggle, leading to delays or mistakes. Ideally, the person should demonstrate strong organizational skills in their personal or professional life.
Financial Literacy
Executors often deal with financial matters, such as valuing assets, managing investments, and addressing tax obligations. While they don’t need to be financial experts, they should have a basic understanding of financial principles and be comfortable seeking professional advice when necessary. If your estate includes significant assets or business interests, this becomes even more crucial.
Residency and Legal Considerations
The executor’s residency can affect estate administration. While Ontario law does not prohibit appointing a non-resident executor, it can complicate matters. A non-resident executor is typically required to post an administration bond, which acts as a financial guarantee. This can be costly and time-consuming. To simplify the process, it’s preferable to choose an executor who resides in Ontario or elsewhere in Canada.
Compatibility with Beneficiaries
An effective executor must be able to communicate and collaborate with beneficiaries. If family tensions are anticipated, a neutral party (someone who is not a beneficiary) may help prevent conflicts of interest. However, it’s common for family members who are also beneficiaries to act as executors. In such cases, ensure they have the temperament to handle potential disputes diplomatically.
Age and Health
Your executor should be in good health and likely to outlive you. It’s also wise to name at least one alternate executor in case your first choice is unable to serve when the time comes.
Complexity of the Estate
The complexity of your estate should influence your choice. For a simple estate, a trusted family member or friend may be suitable. However, if your estate includes multiple properties, significant investments, business interests, or international assets, you may want to appoint a professional executor, such as an estate lawyer, that can bring expertise and impartiality to the role.
Compensation and Professional Executors
Under Ontario law, executors are entitled to reasonable compensation, typically a percentage of the estate’s value. However, you can specify in a will that you do not want your executors to take compensation. You should be transparent about compensation with your chosen executor. If the role involves substantial work, hiring an estate lawyer to act as your executor may be the most practical option.
Administering an estate can be a demanding and time-consuming task. Your chosen trustee must be willing to take on this responsibility. It is always a good idea to discuss your intentions with them beforehand and ensure they are comfortable accepting the role.
Your estate plan is more than just a legal document, it’s a legacy for your loved ones. Choosing the right executer is an essential step to safeguarding your legacy.
At E is For Estates we provide comprehensive Estate Administration services and can help you navigate this vital process.
This article is intended for informational purposes only. For personalized advice tailored to your specific circumstance, please reach out to the E is for Estates team.
Erin Watson, J.D., B.A.
Barrister & Solicitor
E is for Estates
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