Building your Financial
Success
With Alain Aube
Estate Planning
Choosing an executor
DRAFTING A WILL INVOLVES A number of important decisions. One of those
is choosing an executor—the person or persons responsible for ensuring
that instructions in your will are carried out.
An executor is critical to the process of passing along assets to your
heirs. An executor must act on your behalf after your death, taking care
of the details of your estate.
Many people choose a relative or close friend. Often, more than one
person is chosen to fulfill the role. Those with more complex financial
affairs sometimes appoint a professional, such as a lawyer, to be
co-executor. Another alternative is to leave clear instructions to the
executor to make use of professional legal and accounting services. But,
before you make your choice, you should know what’s involved. Here are a
few of the tasks your executor could be called on to perform:
• Locating, reading, and interpreting the will.
• Arranging probate (having the court confirm the validity of the will,
and appointment of the executor), if required. Probate is usually
required for all wills so third parties (like banks) know they can deal
with the executor. But, for small estates, it may be possible to
administer the estate without probate if third parties do not insist on
it. Depending on the size of the estate, it may be beneficial to consult
with a lawyer.
• Finding and dealing with beneficiaries.
• Finding, valuing, managing, and distributing assets ranging from real
estate to personal items. This can involve dealing with bank accounts,
pensions, insurance policy proceeds, and investments.
• Contacting institutions and individuals with whom you have financial
dealings.
• Paying outstanding debts and estate expenses (as well as advertising
for creditors).
• Making or assisting in funeral arrangements.
• Preparing and filing your final income tax return, and if necessary, a
return for your estate.
• Administering on-going trusts created by your will.
• Attending to the management, and perhaps sale, of your business if you
are a small business owner.
Acting as executor can be complicated and time-consuming. It may also
require considerable financial acumen. If you intend for a spouse,
sibling, close friend or relative to be your sole executor, make sure he
or she has the required level of expertise, and is familiar with your
wishes. A good relationship with your family is also important. Ideally,
an executor should live nearby; otherwise, considerable travel could be
involved.
An executor needn’t go it alone. In most provinces, the executor is
allowed to hire professionals to help with duties, without seeking the
permission of beneficiaries, family members, or courts. Lawyers,
accountants, notaries, and trust companies are often retained by
executors.
Before appointing anyone, discuss the matter with your potential
executor. It’s important that the person be willing, and aware of the
duties involved.
Also, appoint a contingent executor to act in the situation where your
primary executor, often your spouse, is unable to carry out the
function.
