Imagine
for a moment you have been appointed executor of someone’s estate, and he or
she passes away. Do you know what to do? Where will the deceased's things go?
Where do you even start? Or, perhaps you are writing your will and you need to
decide who to appoint as executor; here are some things to consider regarding
this important post.
Acting
as an executor can be very challenging. Just ask anyone who has been a executor
in the past and many will tell you it can be very time consuming, emotionally
draining, difficult and seem like it never ends.
You
should give this responsibility to someone knowing that the task will be
time-consuming and stressful. Once someone begins the process of dealing with
the estate assets, they are legally bound to complete the job, and can only be
relieved of the responsibility by a court order. No one can be forced to act as
the executor.
Appointing
an Executor in the First Place
When
making a will, the testator (will maker) should appoint someone executor who
will make responsible decisions, and who will follow any directions left in the
will for the disposal or distribution of property. An executor may be a family
member, close friend, or sometimes simply someone who has the ability to handle
an estate (e.g., a trust company). A person appointed to handle an estate in a
will is called the executor; a person not appointed in the will but handling
the estate anyway is called the administrator.
Who
Qualifies as a Good Executor?
The majority of Canadians appoint family over friends as the executor of their will, according to a BMO Financial Group study. Being
an executor is a huge responsibility. The fate of someone else’s belongings is
in the executor's hands and the executor must be capable of honoring the
deceased's wishes. Choosing someone to be an executor is a major decision,
essentially it making decisions on someone else’s behalf.
The
duties listed above require an executor that has certain qualities and a
particular mindset. An executor who will likely do a good job is someone who
possesses such attributes as patience, wisdom, knowledge, discretion, and
organization. These people embrace their new responsibility of being appointed
executor and they take on these tasks maturely and carefully. There are a
couple of things you might want to consider while making the decision to accept
the executor role
However,
with executor responsibilities consisting of nearly 50 tasks including tax,
inheritance and family property laws, many may not appreciate the complexities
that come with this duty.
“Being
appointed as the executor of a loved one’s estate can be a daunting duty that
involves an overwhelming number of tasks, some of which can be highly complex,”
said Sara Plant, chief executive officer, BMO Trust Company. “Not only can it
be an emotional period, but executors are often expected to dedicate a lot of
time and take on a lot of responsibility that is often best left to a
professional.”
The
study showed that of the 85% who appointed a family member 40% appointed
spouses and only 1% appointed a trust company as the executor of their own
will.
The
results of the study also revealed that, if appointed as executor, the majority
of Canadians (65%) would not, or are not sure if they would hire a professional
to assist them.
According
to the Canadian Bar Association, “The executor gathers up the estate assets,
pays the deceased’s debts, and divides what remains of the deceased’s estate
among the beneficiaries.”
Executor’s
Duties
Below
you will find a list of duties of an executor. This list is far from exhaustive
but illustrates how important it is to choose a good executor. Remember,
settling your estate is not an honour. It is work. Choose your executor
carefully to ensure that he or she can handle the job.
The
following is not a complete list of the duties and responsibilities of an
executor or executrix, but it does provide a good overview of the principal
tasks:
1.
Immediately After Death
Arrange
for organ donation
Arrange
for funeral:
Review
Will with lawyer
Arrange
for care of dependents and pets
Find
and secure all assets: Home, Contents of home, Other real estate, Personal
property, Business, Vehicle, Perishable goods, Access and list the contents of
any Safety deposit box
Obtain
insurance for any vacant real estate.
2. Find
all ongoing expenses and debts
Stop
all unnecessary expenses: Subscriptions (magazine, theatre), Health care (home
care), Memberships (gym, club, sports, auto, professional, etc), Entertainment
(cable, satellite, websites), Communication (telephone, cell phone, Internet),
Insurance (auto, disability).
Forward
mail
Notify
all holders of assets: Bank, Broker, Investment advisor, Insurer.
Notify
all service providers: Utility companies, Landlord, Property maintenance
Cancel
credit and debit cards
Review
all documents relating to assets: Property insurance, Mortgage, Lease,
Business, Investment.
Review
all documents relating to financial obligations: Contracts, Divorce or
separation agreement, Court orders.
3.
Soon After Death
Institute
plan for securing and managing assets until sale, disposal or distribution
Re-register
or transfer ownership of all assets to the estate
Obtain
valuation of all assets
Prepare
inventory of assets and liabilities
Obtain
probate
Schedule
payment of all debts.
4.
Within Weeks of Death
Meet
with all beneficiaries of estate
Maintain
or initiate legal actions on behalf of the estate
Defend
legal actions against the estate
Advertise
for creditors
Collect
life insurance
Arrange
for transfer of assets passing outside the estate: Registered investments,
Jointly held accounts and land.
5.
Remaining Estate Settlement Process
Maintain
records of assets and estate administration
Sell
assets, as appropriate
Collect
debts
Pay
debts
Litigate
or settle all claims by or against the estate
File
outstanding tax returns (including terminal return)
File
estate tax returns
Obtain
tax clearance certificate
Obtain
interpretation of Will
Distribute
assets according to the Will: To individuals, To charities, To trusts.
Claim
executor’s fees
Obtain
releases from beneficiaries.
The
information in this articles was taken from:
